PRAYERS

The First Deputy Chairman of Ways and Means took the Chair as Deputy Speaker, pursuant to the Standing Order.

Christopher Chope: I beg to move, That the House do sit in private.

Question put forthwith, pursuant to Standing Order No. 163 (motions to sit in private):—
	 The House divided: Ayes 0, Noes 42.

Question accordingly negatived.

Point of Order

Christopher Chope: On a point of order, Madam Deputy Speaker. In the light of the news overnight that the Prime Minister has sold out British interests even more quickly than expected in Lisbon in the
	"Last Supper for Britain as an independent sovereign state"
	in the words of one of our newspapers this morning, have you received notice that the Government intend to make a statement to the House today?

Madam Deputy Speaker: I thank the hon. Member for that point of order. I have not received notice from the Government and, of course, it is entirely up to them whether they choose to make a statement to the House.

Orders of the Day

Building Societies (Funding) and Mutual Societies (Transfers) Bill

Lords amendments considered.

Clause 3
	 — 
	Transfers to subsidiaries of other mutuals

Lords amendment: No. 1.

John Butterfill: I beg to move, That the House agrees with the Lords in the said amendment.

Madam Deputy Speaker: With this we may discuss Lords amendments Nos. 2 to 6.

John Butterfill: The amendments arise out of difficulties that we experienced in tabling appropriate clauses when the House first considered the Bill. They do not affect the first part of the Bill, which extends the right of building societies to greater access to capital markets. We are not considering that today.
	However, the second part of the Bill was intended to allow all mutual financials to merge with one another without either party losing their mutuality. Until now, if, for example, a building society wished to merge with a friendly society, one of them would have to lose its mutuality en route. That spoils the basis of mutuality.
	The Bill allows financial mutuals to merge without either side losing its mutuality. That applies to all mutuals with the exception of credit unions—and, sadly, at the time when the measure left this House, of mutual insurers. The reason for that was that mutual insurers frequently traded as companies and were therefore caught by European Union and European economic area company legislation. It was not possible in the time available for the Bill's first stages to find a draft wording that would cover that eventuality and be orderly. Happily, after the measure left this place, the Royal London mutual instructed Herbert Smith and Company, which instructed counsel. Between them they managed to produce the wording that we are being asked to consider this morning. Thanks to what happened in another place—I pay tribute to my noble Friend Lord Naseby—if the amendments are accepted, all the original objectives of the Bill will have been achieved.

Philip Davies: In the light of what my hon. Friend has just said, can he confirm whether the new ruling will be subject to a potential test case in the UK courts or the European courts?

John Butterfill: I do not think that there is any likelihood of the ruling being contested in either group of courts. I cannot absolutely confirm that, but I believe that the UK courts would be adequate.

Christopher Chope: Paragraph 5 of the explanatory notes, contained in the helpful commentary on the Lords amendments that my hon. Friend has produced, says that Lords amendments Nos. 1 to 3 ensure that
	"transfers of mutual societies can apply where the transfer is to a subsidiary of an EEA mutual (which could include a mutual insurer) as well as where the transfer is to a subsidiary of another UK mutual."
	I would be interested to hear whether that works the other way as well. Can that apply to transfers from a subsidiary of an EEA mutual? We have all had experience of what seems to be a one-way process, whereby European organisations can acquire British interests, but we do not seem to be able to acquire their interests in return if we wish to.

John Butterfill: Certainly the provisions would enable that to be the case, but the process would still be subject to the legislation covering the other EEA mutual, following on from the principle of subsidiarity, which I know my hon. Friend keenly supports.

Christopher Chope: I am grateful to my hon. Friend for giving way again. Having answered my question rather succinctly, will he now address an even more significant issue—the ruling out of the use of hybrid instrument procedures? That was touched on in the other place, but can he give any good reason why the hybrid instrument procedure should not apply in the case of provisions under the Bill?

John Butterfill: Yes, because that will not actually occur. If my hon. Friend is concerned about that, he should know that the Bill is simply an enabling Bill. It will enable the Treasury to bring forward proposals from time to time and it will be subject to the affirmative procedure. If he were concerned about an issue, no doubt he could raise it at the appropriate time, but we do not think that the hybridity issue will arise. Because of that, we want to make the position clear in the legislation, rather than having to deal with it at a later date.

Christopher Chope: But surely if the hybridity issue will not arise, there is no need for Lords amendment No. 1. If the hybridity issue arises, that will only be because private interests may be being prejudiced as a result of a transfer. If private interests are going to be prejudiced as a result of a transfer, surely it is right that the hybrid instrument procedure in the other House should be applicable.

John Butterfill: We do not think that that can arise, but we are establishing that beyond peradventure. However, no doubt the Minister will deal with the issue when she addresses the House—the point is very technical, as my hon. Friend will be aware.

Lembit �pik: Presumably the progenitors of the amendments, which I understand from the hon. Gentleman to be the industry itself, will have considered the hybridity and European issues. Will he therefore give an indication of whether either or both of those considerations were discussed with the organisations from the sector that were involved in formulating the amendments, and if so, what their view was?

John Butterfill: All the proposals were discussed with the industry quite extensively and were of course dealt with extensively by the Treasury law team. We are all happy with what is before us and I am sure that the Minister will confirm that.

Christopher Chope: My hon. Friend has not dealt with the Channel Islands and the Isle of Man. Why does he think it important that the provisions should be extended to the Channel Islands and the Isle of Man?

John Butterfill: With his usual perceptive nature my hon. Friend will have noted that that issue arises in the next group of amendments, not this one. No doubt we shall deal with it in timeI am sure that Madam Deputy Speaker would be unhappy if I were to deal with it now.
	This complex group of amendments has been thoroughly tested before being brought back to the House. We are happy that it achieves the objectives that we all wanted when the original Bill was first introduced in this place. We are now satisfied that the group does just that and no more. I therefore recommend the amendment to the House.

Mark Hoban: I want to make a few brief remarks about the group. First, however, I congratulate my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) on his success in navigating his third Bill on to the statute book[Hon. Members: Fourth.] My hon. Friend's record improves by the minute.
	The Bill is important and the amendments in the group address a gap that was left unfilled after Report and Third Reading earlier this year. My hon. Friend said that the amendments in the group enable mutual insurers to take advantage of the provisions of the Bill. They also extend the Bill to other mutuals in the EEA. I want to touch on some of the consequences of that, because it potentially brings within the ambit of the Bill a vast range of co-operatives in other EEA member states. We need to understand precisely what the impact could be of Lords amendment No. 3, which introduces the definition of an EEA mutual society.
	Before I deal with that issue in greater length, however, I turn to Lords amendment No. 1, which deals with hybridity, which my hon. Friend the Member for Christchurch (Mr. Chope) raised in an intervention on my hon. Friend the Member for Bournemouth, West. As I understand it, the issue arises in part because a number of mutuals are established by private Bill. There was a concern that if an order was introduced to deal with the merger of two mutuals, one of which had been established under a private Bill, the hybrid procedure might apply. Lords amendment No. 1 removes that risk by ensuring that where an order might be treated as a hybrid instrument, another order can be made to ensure that it proceeds through the House without the hybrid instrument process applying.
	In the debate on the matter in the other place, Lord Evans of Temple Guiting asserted that the Government believed the amendment to be necessary,
	because an order under Clause 3 could make provisions giving members of a transferring mutual membership and other rights in the holding mutual.
	He continued:
	That could require changes to the constitution of the holding mutual. Where the holding mutual has a unique legal forma private Act of Parliament, for examplethat could raise an issue of hybridity. The amendment excludes the hybrid investment procedure so avoiding unnecessary delay and complications in making the instrument.[ Official Report, House of Lords, 10 July 2007; Vol. 693, c. 1358-59.]
	We understand that the hybrid procedure can add delay. It is a thorough process; the hon. Members on both sides of the House who served on the Select Committee on the Crossrail Bill will remember the thorough scrutiny that that hybrid Bill went through. I am concerned that, by losing the hybrid instrument procedure, we will remove a level of protection and parliamentary scrutiny that would otherwise be available to members of a mutual who were dissatisfied with the proposals.
	Hybrid Bills provide an opportunity for members of the public to petition a Select Committee and appear before it to express their concerns about the Bill and how it will affect them. That gives the Select Committee an opportunity to amend the Bill. If a member of the public was dissatisfied with a proposal and felt that their rights were being impaired, the hybrid instrument procedure would give them some protection. Will the Minister reassure us on this matter? Why does she think that removing the hybrid procedure is in the interest of the mutuals and their members? It offers protection at the moment, which they would lose if Lords amendment No. 1 were accepted today.

Christopher Chope: My hon. Friend is on to a good point here. It is significant that the explanatory notes on the Lords amendments make no attempt to justify the proposal that the hybrid procedure should not be applicable when private interests could be jeopardised. I am glad that he is putting the Minister on the spot and asking her to justify a measure that, while not setting a completely fresh precedent, should be used only in exceptional circumstancesnamely, the removal of the hybrid instruments that are available to petitioners in the other place.

Mark Hoban: Indeed

John Butterfill: Will my hon. Friend give way?

Madam Deputy Speaker: Order. The hon. Member for Fareham (Mr. Hoban) must reply to the first intervention. Then he might well be willing to take a second.

Mark Hoban: I am grateful for your guidance, Madam Deputy Speaker.
	My hon. Friend the Member for Christchurch makes an important point. The explanatory notes explain clearly what is happening, but they do not explain why it is happening. Considering the Lords amendments this morning gives us the opportunity to give them proper scrutiny and to understand the purpose for which they were tabled. I am sure that the Minister will be able to expound on the merits of removing the hybrid instrument procedure. This debate gives us the opportunity to discuss that point.

John Butterfill: Perhaps my hon. Friend the Member for Christchurch (Mr. Chope) has not read the explanatory notes fully. They clearly state:
	If the EEA mutual has a unique legal form that might raise a question of hybridity.
	That could be a problem. Our difficulty is that we do not know what the precise legal form of other EEA mutuals might be. The amendment has been included to overcome that problem.

Mark Hoban: I am grateful to my hon. Friend for that clarification. The uncertainty about the precise legal form of an EEA mutualI do not know, for example, what the constitution of mutuals would be in the Czech Republic or any other EU member statestrengthens the need for a clear explanation of why the hybrid instrument procedure should be removed by Lords amendment No. 1; otherwise, a greater degree of uncertainty could be created. I am sure, however, that the Minister will be able to deal with that question.

Christopher Chope: Does my hon. Friend share my view that there is a distinction to be drawn between the question whether the hybrid procedure is relevantmy hon. Friend the Member for Bournemouth, West (Sir John Butterfill) has suggested that it might beand the question whether, if relevant, the procedure should be excluded by the provisions of the Bill?

Mark Hoban: That distinction can clearly be drawn, but I think that my hon. Friend the Member for Bournemouth, West has established why this is an issue. We now need to move on to the second part of the argument advanced by my hon. Friend the Member for Christchurch, and to ask why it is appropriate to remove the hybrid instrument procedure. I have not been privy to the discussions between the very innovative lawyers at Herbert Smith, their counsel and the Treasury, so I rather hope that the Minister will be able to shed some light on both parts of the argument about the hybrid instrument procedure. Why is it relevant, and why should it be removed?
	I must point out to my hon. Friend the Member for Christchurch that this is not the only issue that I have with this group of amendments, and I should like to move on to my next point, as I am aware that other hon. Members wish to discuss other business this morning. I want to ascertain whether an order-making power that had been inserted by the amendments would be subject to the negative or the affirmative procedure. My hon. Friend the Member for Bournemouth, West will have a clearer memory of this than I doindeed, he alluded to it earlierbut my recollection is that, on Second Reading and on Report, he and the Minister's predecessor, the right hon. Member for Normanton (Ed Balls), emphasised the importance of ensuring that the affirmative procedure was used, as a means of providing further parliamentary scrutiny, given that this is predominantly an enabling Bill.
	Lords amendment No. 3 talks about the Treasury specifying by order
	a body which is a cooperative or mutual undertaking,
	but it was unclear from the Bill, when it left this House in April, whether that would fall under the negative resolution procedure. Clause 3(6) of the original Bill seems to limit the affirmative procedure to orders made as a consequence of subsection (10) and to orders that amend paragraph (a) or (b) of subsection (11). We were led to believe that much of the Bill would be covered by the affirmative procedure to ensure that Members in both Houses had the opportunity to debate the issues, rather than relying on Members praying for the annulment of an order. I should be grateful for some clarification from the Minister on whether the order-making powers in proposed new subsection (c) in Lords amendment No. 3 will be subject to the affirmative or the negative procedure.
	I want to turn now to the substance of Lords amendment No. 3. As my hon. Friend the Member for Bournemouth, West said, the original clause limited the different types of mutuals that could merge to building societies, friendly societies and industrial and provident societies. The amendment would allow that definition to be broadened to include mutual insurers by making reference to EEA mutual societies. We have broadened the Bill to apply to UK-based mutuals in order to include mutual insurers, and I am concerned that the drafting of the amendment would broaden the range of European co-operatives that could take advantage of the Bill.
	Lords amendment No. 3 first defines an EEA mutual society as
	a body which is a European Cooperative Society for the purposes of Council Regulation (EC) No 1435/2003 (statute for a European Cooperative Society).
	I took the trouble to print out the regulation to see what sort of mutuals might be covered [Interruption.] I will resist the Minister's entreaty to read it out, as I am sure that you would rule me out of order for straying from the point, Madam Deputy Speaker. However, I could not find any definition in the regulation that would restrict the type of mutuals that could merge with a UK financial mutual to comparable European financial mutuals. Paragraph (7), for example, states:
	Cooperatives are primarily groups of persons or legal entities with particular operating principles that are different from those of other economic agents. These include principles of democratic structure and control and the distribution of the net profit for the financial year on an equitable basis.
	It goes on to mention the various principles that a European co-operative society or SCE might have and it lists seven. I shall not read them out. If the Minister tempted me to do so, it would be to the regret of the whole House, as there are 24 pages of regulation.
	My concern is that these provisions cover all sorts of co-operatives. I spent my holiday in France this year and the village we stayed in had a wine-making co-operativeas, indeed, did all the villages in the local area. However, there is nothing in the current drafting to suggest why wine-making co-operatives in France could not merge with a UK financial mutual. I am sure that that would not happen and it sounds preposterous until we consider the fact that at least one French insurance company that I am aware of owns a vineyard. There could occasionally be a conflict and other French wine-making co-operatives could acquire the taste for owning insurance companies. It may sound a somewhat frivolous point, but it emphasises my concern that Lords amendment No. 3 starts off by enabling any co-operative falling within the scope of regulation 1435/2003 to enter into a merger with a UK financial mutual. The Minister might say that the order-making power in the provision will be used to define the type of mutual that can acquire a UK financial mutual and to rule out the prospect of the French wine-making co-operative from doing so, but I shall be grateful for her assurance that that is indeed the case.

Lembit �pik: I am following and I am intrigued by the hon. Gentleman's argument, but what evil is he seeking to prevent? If for some reason a British financial institution wanted to merge with a wine-making co-operative in the south of France, I presume that it would do so only because it thought it was in the best economic interests of the business. I am not completely clear about what precisely the hon. Gentleman is trying to prevent UK financial mutuals from doing. As far as I can see, they are motivated not by a love of wine, but by a love of profit.

Mark Hoban: Defenders of the mutual societies would say that they are not motivated by a love of profit, but by a love of serving their members. However, the hon. Gentleman makes an important point. In response, the Bill was given a Second Reading on the basis that it would facilitate the merger of different types of financial mutuals rather than create some mutual conglomerate that covers a whole range of activities from selling insurance to selling bottles of winepleasurable though that conjunction of activities might be. I am merely seeking clarification from the Minister of how she believes Lords amendment No. 3 will work. Does she envisage that an order will be introduced to define more clearly the types of financial mutuals that are covered by this particular regulation in order to prevent a merger with non-financial mutuals of whatever nature?
	There remains one potential anomaly to which I would like to draw the attention of the House. On Second Reading, we had some discussion about the exclusion of credit unions from the legislation. We understood the reasons for that and I shall not depart from that consensus. However, I wonder whether a credit union based in another EEA state could merge with a UK financial mutual whereas a UK credit union could not. I am concerned that there could be an uneven playing field here as between other EEA financial mutuals and credit unions that can merge with UK financial mutuals and UK credit unions that cannot merge. Will the Minister clarify whether, under the order-making power in amendment No. 3(c), other EEA member state credit unions could be excluded from merging with UK financial mutuals? It is important for the House to understand how the amendment will operate in practice.

Christopher Chope: Does my hon. Friend agree that this is extremely complicated territory and that it would be easier for the House to follow what was happening if the Minister were to intervene on him when he raised these specific points? We would then be able establish whether we were satisfied before moving on to his next point.

Mark Hoban: My hon. Friend, who has great experience in these matters, makes a valid point. As a gentleman, I would always give way to the Minister if she sought to intervene as my speech progressed. I would certainly hate there to be any unanswered points at the end of the debate.

John Butterfill: Perhaps I can enlighten my hon. Friend. I refer him to clause 3(9) of the original Bill, which defines financial mutuals and the categories under which they fall. It is clear that they do not include credit unionseither here or abroad.

Mark Hoban: My hon. Friend makes an important point. I am not a parliamentary draftsman, so I bow to the experience of those whom he has consulted on this matter. However, I remain keen to ensure that the link between amendment No. 3 and its definition of an EEA mutual society cross-references clearly with the definition in clause 3(9) of a mutual society. Perhaps the Minister will clarify whether that linkage actually exists. It is a powerful point, because if established, it completely removes the problem of the French wine-making co-operative [Interruption.]

Philip Davies: I, too, bow to the greater experience of my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) in these matters, but I wonder whether there is a danger of putting too much faith in the Treasury. Amendment No. 3 (c) clearly refers to
	a cooperative or mutual undertaking of such description as the Treasury specify by order,
	so it could be subject to change at some future point. Whatever the Minister says is the current intention may well be superseded in the future.

Mark Hoban: My hon. Friend makes an important point, which is why we need more clarity about what is currently intended to be within and without the scope of the amendment. I am sure that the Minister will be able to address the issue in her remarks.

Christopher Chope: Does my hon. Friend accept that a UK building society, financial mutual or mutual society would also be an EEA mutual society, because the United Kingdom is part of the EEA? Were the amendment passed, we would have two separate definitions: one of an EEA mutual society, and one of a mutual society. Surely the EEA mutual society and the mutual society are the same.

Mark Hoban: We are getting into some tricky territory relating to drafting and how the clauses interact. I would be concerned if amendment No. 3 overrode subsection (9) such that credit unions, which we agreed were outside the scope of the Bill, could be brought in by virtue of the definition of an EEA mutual. I am sure that the Minister will clarify that eloquently when she chooses to speak in the debate.
	Extraterritoriality, whereby a Government seek to regulate activities that take place in other states, is a thorny issue in the financial services industry. I am a little concerned that the way in which amendment No. 3 interacts with clause 3(1) and (2) gives rise to the accusation of extraterritoriality. I am sure that the Minister is also wary of other states trying to regulate extraterritorially in the UK, and we would not want to be accused of introducing the same vice in the Bill.
	Clause 3(1) gives the Treasury the power to modify transfer provisions as it thinks appropriate, to facilitate the transfer of business between mutual societies. Subsection (2) indicates the extent to which the Treasury can intervene by referring to membership rights and so on. Will the Treasury be able to stipulate conditions about membership of a new pan-European financial mutual, when an EEA financial mutual acquires a UK financial mutual? The excellent explanatory notes, in reference to Lords amendment No. 6 and the justification of the charging by the FSA, state:
	The extension of clause 3 to EEA mutuals will require certain safeguards to be in place, equivalent to those applicable to domestic mutuals, regarding membership rights in the holding mutual and further demutualization.
	Amendment No. 3 would therefore appear to give the Treasury power to stipulate the future activities of a pan-European financial mutual. I suspect that it would enable the Treasury to say that such a mutual could not demutualise. In the event of further mergers, the Treasury, because of its earlier stipulations on mergers, might be able to restrict the commercial freedom of a mutual as it develops and grows.

Lembit �pik: My interpretation would be that the Treasury could stipulate what happens within the jurisdiction of the UK but not necessarily elsewhere. Therefore, would not it be expedient for any pan-European organisation to operate as a subsidiary in the United Kingdom, to fulfil any of the British Government's stipulations, and to operate on a connected but not identical basis in other parts of Europe?

Mark Hoban: The hon. Gentleman might be right, but we need some clarity. From reading the explanatory notes, I am not sure what the limits will be to the operation of the Treasury's powers. If his interpretation is right, my concern is met, but that is not clear at the moment. An EEA financial mutual might choose not to merge with a UK financial mutual because it fears that the provisions that the Treasury can make under clause 3(1) could impede its future pan-European operations.

Lembit �pik: Guidance from the Minister on this point is probably helpful, but I suspect that it is a pretty open-and-shut case. Will the Minister confirm that any legislation that we pass today will only be relevant to activities within the jurisdiction of the British Governmentthose in the United Kingdom?

Kitty Ussher: indicated assent.

Lembit �pik: The Minister is nodding, so I suspect that she will confirm that the issue raised by the hon. Member for Fareham (Mr. Hoban) is resolved by the fact that the legislation that we pass now will only be applicable to countries directly overseen by the British Government.

Mark Hoban: The hon. Gentleman might be right, and the Minister might indicate that in her remarks. I would add, however, that people might become members of a pan-European financial mutual, so how do we protect their rights? We have one sort of regulations for European co-operative societies, but the European Commission proposed a harmonised set of rules for European financial mutuals, which might give greater protection on a pan-European basis. Those proposals, however, have been withdrawn.

John Butterfill: My hon. Friend is being untypicallyor atypicallynaive. The situation is no different from that for banks. Santander, which bought Abbey, operates as a pan-European banking conglomerate. Its activities in the UK, however, are regulated by the FSA and the Treasury. There would be no difference between what happened in relation to a commercial bank and what happened in relation to a European-wide financial mutual: what it did in the UK would be regulated by the UK. I would have thought that obvious, and I do not quite understand my hon. Friend's concerns.

Mark Hoban: Part of this process is to tease out what will happen when the amendments come into force. When mutuals merge, and a pan-European financial mutual is created, I am not clear how members rights will be protected in that larger organisation. If a mutual becomes a subsidiary of a pan-European mutual, how would that work in practice? I would be content if the Minister gave the House the assurances that the hon. Member for Montgomeryshire (Lembit pik) and my hon. Friend the Member for Bournemouth, West have offered. Some clarity would be helpful, however, given that the explanatory notes are not as full as they could be in explaining the matter.

Philip Davies: I feel that I should leap to my hon. Friend's defence in the face of the onslaught from my hon. Friend the Member for Bournemouth, West (Sir John Butterfill). Does he agree that the analogy given by my hon. Friend the Member for Bournemouth, West is not completely accurate, because while the activities of such a mutual relating to customers and consumers will be regulated by the FSA, in the same way as those of any bank, the issue of membership rights is totally different, and does not apply in the case of Santander and Abbey?

Mark Hoban: I do not want to go too far down this route. My hon. Friend makes an important point. UK shareholder rights are different from those for a shareholder in a Spanish organisation; shareholder rights are not the same across all EEA member states. I am sure that the Minister will clarify the situation.

Christopher Chope: Will my hon. Friend give way?

Mark Hoban: I will give way one last time.

Christopher Chope: I think that my hon. Friend is on to a good point. There is a distinction between members of a mutual society and shareholders in a company. The Abbey National used to be a building society with members, whose interests were bought out when it became a company; the company was then taken over by Banco Santander. What we are discussing in this instance is the possibility of a mutual building society being taken over by a European bank which is a company, and members of the building society in the United Kingdom being disadvantaged by what happens in the operation of that organisation elsewhere in Europe.

Mark Hoban: That is an important point. We may need to distinguish between a member of a mutual as a customer of that mutual and a member of a mutual as a shareholder in the organisation. What I am trying to tease out is how that distinction works in the case of a pan-European mutual. Presumably a member of a United Kingdom mutual that has been taken over would expect to remain a member of the pan-European mutual. How will his rights as a member of that pan-European mutual be protected? The Treasury has powers under clause 3(1) and (2) which I understand to apply to a UK merger. I should like to know how they would apply in the context of a merger between, say, a UK and a French financial mutual.
	Lords amendment No. 6 gives the Financial Services Authority power to charge fees for any functions conferred on it under the Bill. I wonder whether the Minister has had any discussions with the FSA about the type of charges that might be incurred. Our debate on extraterritoriality demonstrated some of the complexities involved in these matters, and the amendment implies that complex situations could be involved in this instance as well.
	My comments have been intended to probe, and to ensure that the House exercises its role of scrutinising legislation. A gap was left at the end of the last Commons stage, and I think it should be filled. We all want financial mutuals to be strengthened, and if the amendments would allow that to happen, I approve of them.

Lembit �pik: I congratulate the hon. Member for Bournemouth, West (Sir John Butterfill) on his prodigious production of legislation. Given that this is his fourth Bill of the session, I suggest that he is rather more successful at running the country than most Ministers. I also congratulate the hon. Member for Fareham (Mr. Hoban) on identifying so many causes of fear in just six amendments. I do not mean to be rude, but I feel that rather than this being a celebration of detail, there is a hint of paranoia over the possibility that the hon. Member for Bournemouth, West may be trying to slip one under the wire and cause the permanent descent of financial mutuals in the United Kingdom into the hands of the operators of vineyards in France.
	The hon. Member for Fareham made an interesting point about hybridity. I should like to know the Minister's views on that, but it seems to me that Lords amendment No. 1 reduces the risk of application of the instruments relating to hybridity. I can see why that is attractive to the industry: it streamlines the process and, as far as I can see, reduces the opportunity for public debate about such changes. Conversely, if the amendment does indeed work in the private interests of companies, it may not necessarily work in the interests of investors or the public in general. Perhaps the Minister could give us her perspective on whether there will be unreasonable restriction of the opportunity for public participation if the hybridinstrument procedure is used less often.

John Butterfill: I am sure the hon. Gentleman is aware that before any merger of this type could take place, the members of both the mutual societies concerned would have to vote in favour of it. They would be the people most directly affected.

Lembit �pik: The hon. Gentleman has summarised the single most important defence for any such change. It is true that there will already be a legal requirement for the most direct stakeholders to have an opportunity to vote on the matter. The Minister may wish to put something on the record for future reference in case the legislation is ever applied in controversial circumstances.
	I do not share the hon. Member for Fareham's concerns about Lords amendment No. 3. He spoke of the dangers of a potential merger between a financial mutual in the United Kingdom and a vineyard or wine-making co-operative in the south of France. I observe in parenthesis that judging by the current performance of my endowment mortgage I probably should have invested my money in French wine, so it may not necessarily be a bad decision. Nevertheless, there is a practical and strategic question to be posed.
	If for some reason a financial mutual in the United Kingdom decided to merge with a co-operative of whatever sort elsewhere in Europe, presumably the usual channels would have to be pursued and the members of the financial mutual would have an opportunity to vote on it. So if the senior management of a financial mutual were able to persuade its British membership that the merger was indeed in the interests of the organisation, who are we to prevent it from taking place? It is obviousin my view, at leastthat the organisation would still be bound by the regulations as they pertain in the United Kingdom, and that the security of the investments of the stakeholders in the United Kingdom would therefore be preserved. I do not entirely understand what the hon. Member for Fareham fears could happen that would not be in the interests of the organisations concerned, and would not be authorised by the stakeholders.

Mark Hoban: The hon. Gentleman is right to point out that it would be up to the members of both organisations to decide. I seek clarification of what is intended by the amendment; I do not mean to pass comment on its application.

Lembit �pik: That is probably a worthwhile request to the Minister. I too hope that she can clarify her understanding of the consequences.
	As I have explained, I believe that the issue is resolved by the fact that the British legislation will apply in all circumstances in which the United Kingdom Government have jurisdiction, and will not apply in areas where they do not have that jurisdiction. The hon. Member for Bournemouth, West has already made an analogy with another financial institution that explicitly organises its operations following a takeover of a British-based financial institution in order to ensure that its British operations must adhere to British legislation, and that at the same time it operates according to the regulations as they apply in other European states.
	I was interested by what the hon. Member for Fareham and others said about the difficulty of not having a harmonised system of regulations across the European Union as a whole. Far be it from me to suggest that that sounds like a curious plea from those on the Conservative Front Bench for fiscal and legislative harmonisation across the EU, which I personally feelperhaps this makes me a Euroscepticwould be taking things too far.

Mark Hoban: I should hate the hon. Gentleman to leave with an incorrect interpretation of my remarks. I merely drew attention to the absence of such harmonised regulations. We are left with the question of how it can be ensured that the interests of members are protected. I recognise that there are different rights in different member states when it comes to, say, shareholders of public companies. We should encourage the rich variety in the European Union rather than seeking to homogenise it.

Lembit �pik: I fully understand the hon. Gentleman's desire to clarify on the record the position of those on the Conservative Front-Bench. For the avoidance of doubt, and because I know from painful experience that irony translates poorly in  Hansard, let me reaffirm to the good people of the United Kingdom that I believe that, on balance, I am still more pro-European than the hon. Gentleman.
	There is, however, an inescapable reality to do with harmonisation. In respect of any such proposed legislation it will be necessary for judgments to be made in the application of regulations in cases of potential mergers. So long as there is not a harmonised system of regulations explicitly defining the terms of mutuality and associated matters across the EU, we will have to depend on the common sense of those interpreting the regulations when a merger is proposed.
	An interesting point was made about credit unions, but that highlights just one of a number of situations in which there could be a grey area and the legislation would have to be interpreted according to specific circumstances. I do not believe that it is possible to frame such proposed legislation so explicitly as to cover in black-and-white terms every possible eventuality. I seek the Minister's guidance on this: will she furnish us with her judgment on whether, when the legislation is applied, there will still need to be a degree of interpretation?
	In the real world, I expect there will be few circumstances in which such uncertainties arise. In the majority of cases, the arguments will be so clear and the mergers so well defined in established precedent that we will not have such a problem. It is also my experience that when we in this House analyse proposed legislation we often over-emphasise potential problems and undervalue the benefits of having professionals making judgments.
	Although I hope the Minister can give some clarification on the issues I have raised, overall the amendments are sensible, as they have been framed with the industry in mind. There is also the ultimate insurance policy: when such mergers are proposed, the members will vote on them.

Christopher Chope: I congratulate my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) on the progress he has made with his Bill. I have the privilege of being one of the co-sponsors, and I look forward to it getting on to the statute bookI am probably almost as excited as he is about that prospect. However, that does not mean that we should not use the opportunity presented to us today to get a little more clarity, particularly from the Government on what their intentions are as they will hold all the cards under the powers we will give them under the Bill.
	The fact that we have a decent chunk of time to discuss the Bill at this stage of the parliamentary Session is a great vindication of the decision taken a few years ago by a previous Leader of the House that we should have a sitting Friday after the long recess so that we can consider amendments from the other place to private Members' Bills that we in this House have carried through to Third Reading. Under the previous arrangements, when the last Friday sitting was at the end of July, it would not have been possible for the Bill to make progress with the amendments made in the other place. There used to be a vicious circle: because of the reluctance of the other place to make amendments that they knew would kill a Bill, Bills were less perfect than they would otherwise be.
	First, I should declare my interests, not only as a sponsor of the Bill but as someone who holds a mortgage with the Nationwide, which is a supreme example of a good mutual. I have my house insurance with the Liverpool Victoria, which I understand is a mutual insurer, and I have a great constituency interest in what we used to call the Portland building societyit has now been taken over by the Nationwide. Its headquarters are in my hon. Friend's constituency, which is, perhaps, one of the reasons he has developed a strong interest in this subject.
	I shall first discuss amendment No. 1. It was moved by Lord Evans of Temple Guiting on 10 July. At that stage, he was a member of the Government so he was speaking on behalf of the Government, but I understand he resigned on Wednesday. I am sure that the Minister will join me in paying tribute to his service, and in particular his contribution in helping to steer the Bill through the other place. He said that the overall purpose of the Bill was to ensure that there were
	helpful amendments to building societies legislation in relation to the wholesale funding limit and the position of their members in the event of an insolvency.[ Official Report, House of Lords, 10 July 2007; Vol. 693, c. 1355.]
	That is important. We discussed earlier in connection with safeguards what happens if a mutual organisation in our country is taken over by a mutual organisation outside the country and therefore outside the bounds of the regulatory control of our regulatory authorities, and that mutual then goes into insolvency. How will members based in the UK who are caught up in such a transfer be protected? It is important that the Minister gives us some assurances on that, particularly in the case of mutual insurance companies, which are much more vulnerable to the marketplace than building societies. The Minister whom I quoted was, of course, speaking before the Northern Rock crisis occurred.

John Butterfill: My hon. Friend does not realise that the scenario he describes could happen today, without this Bill being enacted. The only difference is that it would happen only if one of the parties lost its mutuality. The members would have to vote for that. Any British mutual can be bought by an overseas entity of any type whatsoever, but its members would need to vote for that, and it would lose its mutuality en route. That makes no difference to the scenario my hon. Friend describes. It simply enables them both to remain mutuals.

Christopher Chope: Is that correct? I ask with great respect, as my hon. Friend is a much greater expert in this matter than I am. To go back to the example of the Abbey National, it was originally a mutual society, then its members chose to demutualise and benefited from that, and then in due course that company was taken over by Banco Santander. That had become a shareholder issue, and the shareholders in the company then became shareholders in the Spanish company. In the case of a mutual that is taken over by another mutual, that organisation does not lose its mutual status and its members want to be assured that they will still be members of an organisation that has value and that at some stage in the future they will be able to benefit from that. Therefore, I am unsure whether the issue of a mutual being taken over by a foreign mutual is the same as that of a mutual that becomes a company in this country as a result of a resolution passed by the members. Perhaps the Minister will be able to give some clarification on that when she responds to these points.
	The Northern Rock example involves a building society that gave up its mutuality before losing much of its reputationor perhaps I should say, its head. Many of the erstwhile mutual members of Northern Rock received shares in lieu of their mutual interest and are now, arguably, far worse off than if it had never given up its mutuality.
	However, at least the Northern Rock scenario is under the control of a British regulator and the rules made by this sovereign Parliament. That would not be the case if Northern Rock had been taken over when it was mutual by another mutual somewhere else in the European economic area. That is the distinction to which we need to draw attention.

Lembit �pik: Leaving aside the fact that Northern Rock's recent difficulties obviously have nothing to do with its status as a financial institution

Philip Davies: They do.

Lembit �pik: Well, okaywe will have that discussion in the pub later. Leaving that aside, surely the hon. Member for Christchurch (Mr. Chope) can see that any financial institution based in the United Kingdom must necessarily be subject to British regulations. Is he suggesting that a financial institution taken over by a foreign organisation would be subject to regulations from somewhere else, even though it was operating within the United Kingdom?

Christopher Chope: Obviously, the operations of such an institution within the United Kingdom, in so far as they dealt with retail issuesinsurance or building society services, for examplewould be regulated in this country. I am concerned about the regulations on the operation of such a mutual society. For example, what proportion of loans would it be allowed to take in comparison with the value of its members' interests? One thing that prompted my hon. Friend the Member for Bournemouth, West to introduce this legislation was his liberalising desire for mutual building societies to be able to have access to the wholesale market for funds. It was that power that went to the head of Northern Rock and resulted in its current problems. I do not say that that was the sole cause, but it contributed. If Northern Rock had remained a mutual building society, it would not have been able to get access to those wholesale funds or to get into its current difficulties, which have resulted from recent events in the financial markets.

Lembit �pik: What mechanism can the hon. Gentleman foresee that would enable the people determining whether to make such changes in the status of financial institutions to decide what the strategic decisions of the management were likely to be? The hon. Gentleman cannot blame the structure of the organisation for the decisions that were made; if it were a structural issue, why was only Northern Rock affected and not other similar organisations?

Christopher Chope: I do not say that the problems were all due to the structure of the organisation

Madam Deputy Speaker: I should remind hon. Members that we are not debating the issue of Northern Rock. Enough reference has been made to it for an understanding to have been achieved.

Christopher Chope: I am grateful, Madam Deputy Speaker. You enable me to answer the hon. Gentleman's other point on how we would introduce safeguards, in respect of which I have a bit of a problem with Lords amendment No. 1. At the moment, one of the safeguards is that before any approval, if the issue is a hybrid one, anybody who felt aggrieved could petition the other place under the hybrid instrument procedure. However, under Lords amendment No. 1, such a move would be excluded. Paragraph 6 of the explanatory notes on the Lords amendments refers to the justification for that, but it does not wash. Paragraph 6 states:
	Lords Amendment 1 ensures that any order made under clause 3 which may have effects peculiar to a particular mutual will not be dealt with under the hybrid instrument procedure...As a result of the addition of 'EEA mutual' to clause 3 it is possible that an order... could, for example, require an EEA mutual society acquiring a UK mutual to give transferring members full membership rights in the EEA mutual.
	Most of us would think that a good idea. However, the paragraph goes on:
	If the EEA mutual has a unique legal form that might raise a question of hybridity.
	Okayso it raises a question of hybridity. If the hybrid instrument procedure were applied, members of the UK mutual subject to it would be able to decide whether, either as individuals or collectively, they wished to petition the other place under that procedure.
	Lords amendment No. 1 would ensure, as paragraph 6 goes on,
	that the hybrid instrument procedure would not apply, should such a situation arise.
	Why should it not apply? What mischief could possibly result from the hybrid instrument procedure? The essence of that procedure in the other place is that an opportunity is given to petition, just as people can petition against a private Bill or a hybrid Bill. If the relevant people consider that they need to petition against it, they can; the petition is then considered by the relevant Committee in the other place. That can either reject the petition as being irrelevant or without substance, or say that the petition has substance and merit, and proceed accordingly.

John Butterfill: I bring my hon. Friend back to the point that we would be dealing with two groups of members: the members of a mutual may be borrowers or depositors. In such cases, both the interest groups would be served. I cannot think of another group of people who would have locus standi by petitioning as my hon. Friend suggests. Will he say who they could possibly be?

Christopher Chope: We are talking about hypotheses. If my hon. Friend does not think that any group would have a locus standi to petition in the event that a hybrid instrument had been deemed, there would be no harm in allowing the hybrid instrument procedure, because it would not make any difference. Perhaps neither my hon. Friend nor I are wise enough to know exactly what is behind all this, but paragraph 6 is phrased as it is because somebody thinks that private interests might well be prejudiced as a result of the procedure. Under the hybrid instrument procedure, those interests would have a right to petition in the other place and they might wishI do not know who they would beto preclude that right or opportunity from those aggrieved petitioners.

John Butterfill: My hon. Friend knows very well that in such circumstances mischief-makers could claim to have locus standi, that the procedure for establishing that is complex and long, and that the issue would go to the Court of Referees. People interested in delaying thingsfor whatever reason; another commercial company might want to take the building society over, for examplecould make mischief knowing that, although they would not succeed, they could delay the whole procedure.

Christopher Chope: If one looks at the history of the hybrid instrument procedure, one sees that it has always been the last desperate throw of the people who have been challenged on the issueto say, We cannot afford to delay. It so happens that there would be no delay if the petition were rejected and that in the other House there is what is called, I think, an expedited hybrid instrument procedure to cover the scenario to which my hon. Friend refers. We should not have too much haste if that is going to result in people feeling or being prejudiced against as a result of a takeover of an organisation, in which they have a mutual interest, by an EEA mutual.

Philip Davies: Does my hon. Friend agree that my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) might well be right in saying that this provision would prevent unnecessary delay in any such mutual takeover or joining together? Does he further agree, however, that it might also prevent a necessary delay?

Christopher Chope: Exactlymy hon. Friend is absolutely right. That is why, when looking at this issue, their Lordships' House and a Joint Committee of both Houses regarded the hybrid instrument procedure as sacrosanctas a cherished means of preserving the rights of individuals, which should not be prejudiced by a hybrid instrument. The whole purpose of the procedure is clear. My hon. Friend the Member for Bournemouth, West says that he does not think that a set of circumstances will ever occur when it will be triggered. That is fine, but why not leave the power in the Bill?
	Our noble Friend Lord Naseby raised this issue in the debate in the other place on 10 July. The Minister present said in response that, given the sheaf of notes that he had on hybridity, he would write a full letter about it to our noble Friend. That letter, dated 12 July, was placed in the Library of the other place on 17 July, as deposited paper 2007/563. I intend to quote briefly from itif I can find it from among my papers.  [ Interruption. ] The Minister, helpfully, has a copy. Perhaps she

Madam Deputy Speaker: Order. Perhaps the hon. Gentleman can continue, even without the benefit of the letter.

Christopher Chope: Exactly, Madam Deputy Speaker. Effectively, what the Minister who wrote that letter said was not very different from the explanatory memorandum. It is not satisfactory that we are being asked to allow the rules on hybridity to be disapplied, without any guaranteed safeguards for members who might otherwise be able to resort to those rules. The provisions in the Standing Orders of the other place have stood the test of time as a necessary safeguard. Those set out in Standing Orders Nos. 216 and 216A are clearly stated and do not involve an enormous amount of time; however, they do ensure that those who feel aggrieved can put forward a petition, which can then be considered.
	As someone who did once petition this House in respect of a private Billa house in London in which I had an interest was over the proposed route of the Jubilee line tunnelI know exactly how valuable the petitioning procedure can be. I point out to my hon. Friend the Member for Bournemouth, West in particular that it normally results not in a full hearing in front of the relevant Committee, but in a compromise between those who feel aggrieved and the promoters of the Bill or instrument in question. It is a safeguard that will probably not normally have to be exercised through time being spent in the other place. However, the knowledge on the part of the mutual society in question that, if the instrument is potentially hybrid, it needs to ensure fairness among all the private interests affected, concentrates minds and ensures that the society is more likely to satisfy an aggrieved party's complaints in advance.
	This procedure does have a very important role to play, therefore, in our parliamentary democracy and, indeed, in our constitution. In fact, that is exactly what happened in the case that I was referring to. As a result of our expressing concern that our houses would subside because of the tunnelling works, our local residents association was given cast-iron guarantees that, if any subsidence occurred, it would be paid for by those building the new Jubilee line. I am pleased to say that in the end, there was no subsidence. However, there were concerns that there might be, and without the private Bill procedure and the opportunity to petition, those concerns might have affected the value of houses in the area because people would have been worried about what would happen if subsidence did occur in future. So this procedure is not merely theoretical, but of constitutional significance.
	It is worth telling the House that it is not the case that hybrid orders are never resorted to. First, however, I should point out that I have found three examples since 1 January 2000 of hybrid orders that did complete the hybrid instrument procedure. There were no petitions presented against the London Thames Gateway Development Corporation (Area and Constitution) Order 2004, which was subsequently approved by both Houses. I have not gone into the detail, but perhaps that was because the concerns expressedsimilar to my experience with the Jubilee linewere addressed before the matter reached Parliament. The second example is the Thurrock Development Corporation (Area and Constitution) Order 2003, which was laid before Parliament on 2 July 2003. No petitions were presented against that order, which was subsequently approved by both Houses. The third example is the draft Policing of Airports (Belfast City) Order 2003. Again, no petitions were presented.
	In case any of my hon. Friends are now thinking, Well, is this procedure ever used?, I can tell them that it was used in the context of the West Northamptonshire Development Corporation (Area and Constitution) Order 2004, which was petitioned against. The relevant Select Committee considered the matters complained of in the petitions against the order. They were gone into, and eventually the order was approved by both Houses. However, as a result, it was a better order than it would have been, and those who felt that it would particularly disadvantage them were able to have their say.
	You will know, Madam Deputy Speaker, that the right to petition this House goes back to time immemorialbefore the time when we began having Government legislation in the way we have it today. I cannot understand the reports in today's papers saying that the Government have not got enough legislation for this House and, that as a result, we will be unable to sit so much next year.

Madam Deputy Speaker: Order. I remind the hon. Gentleman that this is a narrow debate on a particular group of amendments.

Christopher Chope: It is indeed narrow, Madam Deputy Speaker, but may I submit that it is also very important, because it is on a subject that affects the rights of the individual subjects of our country?
	As my hon. Friend the Member for Bournemouth, West has pointed out, there is a problem regarding the time that the procedure can take. However, as I did earlier, I draw his attention to House of Lords Standing Order No. 216A.
	It provides for the expedited procedure, under which the Bill does not have to be considered in such detail, and states that the
	hybrid instrument...which, by virtue of the Act authorising it to be made, is, after the expiry of a period prescribed by that Act...to proceed in Parliament as if its provisions would, apart from that Act, require to be enacted by a public bill that is not hybrid...referred to as an expedited hybrid instrument.
	The procedure for such an instrument differs from that applicable to other hybrid instruments.
	The standing order continues:
	A petition...not to affirm an expedited hybrid instrument shall be...deposited...within ten days beginning with the day on which the instrument is laid.
	If the Hybrid Instruments Committee is of the opinion that there ought to be a further inquiry, it conducts that inquiry itself, forthwith. After 10 days, if there is some substance to the petition, the matter is inquired into; the Hybrid Instruments Committee does that itself. The procedure could not be used, as has been suggested, by potential rival bidders, although we know from what happens in the real world that such bidders often get up to all sorts of tricks. We have seen that in relation to a recent takeover of a bank, although we shall leave that to one side.
	I took the liberty of asking the House of Commons Library about the implications of Lords amendment No. 1. Its reply states:
	In general terms those who would have wished to petition against a hybrid instrument would be adversely affected, as treating such an instrument as an ordinary instrument precludes the right to petition.
	It continues:
	Exactly who those individuals or groups would be would depend on the provisions in the instrument.
	That almost goes without saying. This real issue could act adversely against members of mutual societies when they find that their directors have it in mind to sell their interests to other organisations in the European economic area. Those agreed members should have the chance to take advantage of the procedure that I have outlined.
	The problem that I have about all this is that if we reject Lords amendment No. 1, it might jeopardise the whole Billit would depend on whether their lordships could be reconvened to accept our disagreement with it. I hope that the Minister will express her good intentions and those of the Government in respect of how those individuals who might be adversely affected will be protected if that cannot be done by the hybrid instrument procedure.
	I am worried about the predatory action that may come from some EEA mutual insurers. Mutual insurers are basically known much more on the continent than in our country. I shall now translate a document from French. The international association of mutual assurance societies is based in Brussels, in what is sometimes described as the heart of Europe. It produced a helpful note on what mutual insurance is and why one must use it. Under the heading opportunities, it identifies the fact that the insurance market is still expanding because the universe of risks is doing so too. That universe is indeed expanding, but those are risks not only that people want to have insured, but they are risks for insurance companies. The larger the risks insured, the larger the risk to those companies. We know what happened to Lloyd's members.
	What happens when people invest in a mutual savings society and find that that society's interests are taken over by a mutual insurance company which then, in order to buy insurance business, insures things that it should not have done and ends up going bust? Where does that leave the savers in the mutual society originally based in the UK, who may have lost everything? Surely we should safeguard against such a situation. We should be alert to the prospect of predatory action.
	Before I turn to the other amendments, may I tell hon. Members that the issue of hybrid instruments was examined by the Joint Select Committee on Delegated Legislation in 1972-73? Those recommendations were accepted by both Houses. The Committee was chaired by the late Lord Brooke of Cumnor, the father of the current Lord Brooke of Sutton Mandeville, whom I had the privilege of serving for a short time as a Parliamentary Private Secretary when he was a Treasury Minister. That is a distinguished family of statesmen.

Madam Deputy Speaker: Order. Interesting as that might be, I do not think that it is in any way relevant to the amendments that we are discussing.

Christopher Chope: The Joint Select Committee on Delegated Legislation that examined the issue of hybrid instruments said that where those hybrid instruments were such that they might affect individuals, there should not be any removal of the right to use those hybrid instruments. Its concern was that although we have clear rules about what hybrid Bills are and the fact that people have the right to petition for such Bills, the Executive were trying to avoid the hybridity rules that relate to private Bills by trying to use subordinate legislation as the means for getting those hybrid instruments through.
	That is why the hybrid instruments procedure was initiated. It was examined by the Committee, which concluded that the procedure has
	for nearly 50 years provided valuable safeguards for private interests affected by delegated legislation and should be retained.
	That is what is important in the context of this debate: that procedure should be retained and not swept away. If it is to be bypassed by the provisions of this Bill, it is incumbent on the Minister to articulate clearly what alternative safeguards will be available to people who might be adversely affected.
	I turn to the other Lords amendments in this considerable group. I am grateful to my hon. Friend the Member for Fareham (Mr. Hoban) for raising a number of concerns that I had about their provisions, particularly Lords amendment No. 3. I hope that the Minister will be able to give us assurances about the insertion of a definition of an EEA mutual society, which as I said in an intervention, seems to be at odds with the Bill's definition of a mutual society. Surely a UK mutual society is also an EEA mutual society, because the UK is in the EEA.
	It would have been much clearer if the same rules applied everywhere. I hoped that the hon. Member for Montgomeryshire (Lembit pik) was allying himself with the Eurosceptic cause, but I can understand that his ambitions to become president of his party are unlikely to be realisedin the light of the leadership candidatesif he has such credentials. I do not blame him for suppressing them today. In any case, he expressed concerns and I hope that they will be addressed by the Minister.

Lembit �pik: Just for the avoidance of doubt, I can hardly be a Eurosceptic given that my parents are Estonian. If I were to express any scepticism about the case for mutuality rules that work effectively across Europe, I would be made a pariah in Tallinn.

Christopher Chope: I hear the development of the hon. Gentleman's argument, but as I am a member of the parliamentary delegation to the Council of Europe, some of my best friends are Estonian, and I know

Madam Deputy Speaker: Order. I have allowed a little latitude, but that is far enough.

Christopher Chope: I hope that the Minister will be able to respond to the concerns expressed. At the moment, the definition in amendment No. 3 of an EEA mutual society is not confined to financial mutuals, but the definition in the Bill relating to mutual societiesin other words, UK mutual societiesis confined to financial mutuals. My hon. Friend the Member for Fareham made an analogy with a mutual wine-growing co-operative. In this country we have a well known and ancient wine co-operative, of which I am privileged to be a mutual member, and that is the Wine Society. If anyone suggested that the Wine Society might be able to take over a building society, people would think that they must be barking. But on the face of it, the Bill would enable a co-operative vineyard in an EEA state to take over a mutual savings society operating in this country.
	My hon. Friend also referred in passing to the concerns that have been expressed about cost, including the cost of the Financial Services Authority becoming involved at that vague dividing line between its responsibilities in the UK and how much it could be involved in regulating a mutual based outside the UK. I notice from the financial memorandum that the costs to be incurred would never exceed the costs actually incurred by the FSA, but implicit in that is that the FSA would be able to pass on its full costs to any mutuals involved. Concern was expressed in the other place that that might be a deterrent. I am not saying that that would necessarily be a bad thing, because it would be good to have some deterrent against all our mutuals being taken over by foreign organisations.
	I hope that the Minister will be able to address the point that I put to my hon. Friend at the outset about reciprocity. At the moment, the Bill and the notes on it are phrased to suggest that a mutual society in this country could be acquired by or merged with a mutual society elsewhere. However, it would not appear to facilitate the taking over of a foreign mutual by a UK-based mutual.
	I hope that the Minister will be able to address our concerns and give me some assurances, so that we do not have to divide the House and thereby jeopardise the further progress of this important piece of legislation, on which I once again congratulate my hon. Friend the Member for Bournemouth, West.

Philip Davies: I, too, wish to congratulate my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) on getting yet another private Member's Bill to this stage. He is on the threshold of getting another one enacted, and that is a considerable achievement.
	I have followed the debate this morning with interest. Some of the arguments on the amendments are finely balanced, although my hon. Friend made a persuasive case for their incorporation into the Bill. However, my hon. Friends the Member for Fareham (Mr. Hoban) and for Christchurch (Mr. Chope) also gave some persuasive arguments about why we should be concerned by the amendments. I wish to tease out some of the issues and I hope that the Minister will be able to reassure the House that there is nothing sinister behind the amendments, whether intentional or otherwise.
	It would also be helpful if the Minister could clarify which of the amendments are required to comply with EU law and which ones are just thought to be a desirable addition to the Bill. I am not entirely clear which ones we have to accept just to comply once again with our masters in Brussels.
	My hon. Friend the Member for Christchurch made a persuasive case that hybrid instruments have stood the test of time. From the Committee proceedings that he quoted, they would appear to have been in place for some 80 years, so the Government need to do much more to explain why something that has stood the test of time for so long and been considered an important part of our procedure should be ditched for the purposes of this Bill. My hon. Friend suggested that that was a slippery slope that might be extended at some point to future issues, so it is important that the principle that hybrid instruments can be brought before the House is considered in detail. I would not like us to ditch something willy-nilly, after a short debate with few Members present on a Friday morning, for the sake of something that is not necessary. I hope that the Minister can clarify why Lords amendment No. 1 is necessary.
	My hon. Friend the Member for Bournemouth, West said that he could not envisage anybody who might wish to bring the question of hybridity forward, and the only people who would wish to do so would be mischief makers. My hon. Friend has much experience in such matters, and he may well be right, so I shall not quibble with him. However, it says in the explanatory notesLord Evans of Temple Guiting made the same point in the debate in the House of Lordsthat
	an order under clause 3 could...require an EEA mutual society acquiring a UK mutual to give transferring members full membership rights in the EEA mutual. If the EEA mutual has a unique legal form that might raise a question of hybridity.
	That suggests that the Government accept that the Bill might raise questions of hybridity and no one seems to dispute that point. The amendment is merely there to ensure that when a question of hybridity is raised, the hybrid instrument procedure would not apply.
	My hon. Friend the Member for Bournemouth, West made the point that the amendment will prevent unnecessary delay and stop mischief makers causing trouble. That may well be right. It strikes me, however, that if the Government are acknowledging that a question of hybridity could arise, the amendment could prevent a necessary delay from taking place. I do not understand what huge advantage the amendment provides that justifies ditching an important tradition that has stood the test of time. The Minister should go into detail to explain why the amendment is necessary. It strikes me that it is required not for us to comply with EU law, but because the Government think that it is desirable. She should make the position clear.
	Amendments Nos. 2 and 3 would widen the definition of a mutual society. We had an interesting discussion about mutual vineyard owners taking over financial institutions. The point behind that is important. Proposed new paragraph (c) in amendment No. 3 states that the body is
	a body which is a cooperative or mutual undertaking of such description as the Treasury specify by order.
	I tend to be cynical about such measures because they are deliberately vague and might allow the Treasury, perhaps at a later date, to do something that was not intended when the Bill was passed. Given that, it would help the House if the Minister made it clear which bodies the Treasury intends to specify by order, and if she made a commitment that that would not be extended without further parliamentary scrutiny.

John Butterfill: My hon. Friend is aware that the Bill provides that all such orders will be subject to the affirmative resolution procedure. Therefore, the House will have the opportunity of discussing them.

Philip Davies: I am grateful to my hon. Friend for once again reassuring me about the merits of his Bill, and that the safeguards are in place. I am sure he would agree, however, that it is important to tease out the full extent of its implications. When we have consensus on a Billand it seems that we have consensus on this Bill's meritscertain things can slip through that were not intended when it was originally drafted. As my hon. Friend the Member for Christchurch said, given that we have time to discuss the Bill's merits, it is important to make our points clear.

Christopher Chope: Does my hon. Friend agree that to say that something is going to be subject to an affirmative order is not the same as saying that it is like a piece of ordinary legislation, because we will not be able to amend it?

Philip Davies: My hon. Friend has been in Parliament much longer than I have and knows all the tricks of the trade that Governments can use. Something that sounds reassuring at a superficial level may not be so in reality. I am grateful to him for reminding me of the dangers that he has outlined.
	I would like the Minister to address another aspect of amendment No. 3. When we discussed that before, the then Economic Secretary to the Treasury, now Secretary of State for Children, Schools and Families, said that the mutual insurers had to be left out of the Bill because of the possibility of contravening EU law. He said:
	We have considered whether the Bill could be extended to cover companies limited by guarantee that are also insurers, but because insurance is regulated on a Europe-wide basis, we would have to allow the same procedures to apply where the transfer is to a subsidiary of the body corporate in another member state which is similar to a company limited by a guarantee...For that reason, and despite our efforts, we were not able to include mutual insurers in[ Official Report, 27 April 2007; Vol. 459, c. 1156.]
	the new clause in Committee. Given that that was turned on its head when Lord Evans said that the amendment
	is wide enough to encompass mutual insurers and, by permitting transfers under the new provisions to a mutual society established in any EEA state, it ensures that there will be no breach of EC law[ Official Report, House of Lords, 10 July 2007; Vol. 693, c. 1356.],
	it would be helpful for the Minister to explain how we have gone from the stage of something being specifically ruled out, because it would breach EU law, to the stage that we are at now, where something is going to be incorporated to ensure that it complies with EU law. That strikes me as a sharp turnaround in a short space of time. What assurances can she give that the legal opinion on which the amendment is based will not be subject to challenge and will be watertight for the future? I am not a lawyer, and my hon. Friend the Member for Christchurch knows much more about such things than I do, but if we can have a turnaround in a legal opinion in such a short time, I am not convinced that there cannot be a further turnaround in future.
	We have not discussed amendments Nos. 4 and 5 very much, but it seems that they are necessary to comply with EU law. Perhaps the Minister can clarify that. Without them, a mutual in another EEA state would have to establish a UK company subsidiary to benefit from the changes, which might place it at a disadvantage. The changes would ensure that UK and EEA mutual societies were treated equally. The amendments' purpose is not to benefit UK mutual societies in particular, but to benefit mutual societies in other EEA member states.

Lembit �pik: There is a potential slight contradiction between the hon. Gentleman's comments and those of some his colleagues. They see the benefit of harmonisation of regulation across Europe, but he is concerned about that. Surely we would all benefit from a degree of harmonisation to ensure that we at least understand the terms. When a potential linkage or merger between a British-based financial institution and one based elsewhere in Europe is considered, some of the uncertainties and subjective determinations would at least be clarified.

Philip Davies: The hon. Gentleman makes a good point. He may well be right that that would be a good thing and make sense, but why do we need the amendments? Will the benefits be felt by mutual societies in other EEA countries rather than mutuals here? What will be the consequences in practical terms?
	Amendment No. 6 provides for the Financial Services Authority to charge fees for any functions conferred on it by the Bill. It is an eminently sensible addition. It would be perverse should the FSA be out of pocket as a result of the changes. I welcome the amendment. Perhaps the Minister will explain whether that would cover not just the costs of the work in front of the FSA at the time, but the costs of the extra staff that it may have to employ to deal with the additional workload. Lord Evans acknowledged that that would
	result in additional work and, therefore, costs for the FSA.[ Official Report, House of Lords, 10 July 2007; Vol. 693, c. 1360.]
	Presumably, that means that if it is providing additional work, we need additional staff to cope with it. I hope that the fees charged on that basis will cover those additional costs for the FSA as well as the costs incurred at the time when such things are being debated. I welcome the amendment if it means that the fee-charging powers would be extended in that way.
	When I was talking about amendment No. 3, I forgot to mention an important point about its definition of an EEA mutual society. Will the Minister tell the House how many mutuals across the EEA will be brought under the scope of the Bill as a result of the amendments? What are the practicalities of that? Can she outline what the Treasury envisages happening as a result of the provisions, and which mutual societies it has in mind?
	I welcome the Bill. Some of the amendments are absolutely necessary, but I share some of the concerns expressed by my hon. Friend the Member for Christchurch, especially about amendment No. 1. I look forward to the Minister addressing all the concerns that have been raised this morning.

Kitty Ussher: I am extremely positively encouraged by Opposition Members' forensic scrutiny of the Bill during today's debate. I am grateful to the hon. Member for Bournemouth, West (Sir John Butterfill) for presenting the Bill and congratulate him on its success; it is a credit not only to him but also to the plethora of outside organisations, which I support, with which he has been working. The measure will lead to long-lived improvements in our economy.
	I reassure Opposition Members that there are no scary and subterfugeal attempts to achieve anything from the amendments that is not blindingly obvious. I shall use the few moments available to me to

Simon Burns: We have three hours.

Kitty Ussher: In the few moments that I intend to use, given the 32 Bills listed for debate during the next couple of hours, I shall briefly set out our understanding of the amendments and respond to specific points that have been made.
	The amendments fulfil the commitment given in the House to extend the Bill to mutual insurers, which answers one of the main points made by the hon. Member for Shipley (Philip Davies). The Government continue to be appreciative of the support from all those involved in developing the Bill and look forward to implementing its provisions for the benefit of the mutual sector. We shall of course support the amendments, given that we introduced them, with consultation and co-ordination, in the other place. I hope that both sides of the House will be able to support them, too.
	Clauses 3 and 4 will make it easier for one type of mutual society to transfer to the ownership of another type of mutual society as a subsidiary company while retaining the important elements of mutuality; for example, individual members transferring to the subsidiary company may be given voting rights in the holding mutual society. Mutual insurers and certain European mutuals will be included as a result of the amendments made in Committee in the other place on 10 July. I shall explain how they fit into the Bill as it left this place.
	Clause 3 concerns transfers to subsidiaries of other mutuals. Amendment No. 1 ensures that any order made under clause 3, which may have effects peculiar to a particular mutual, will not be dealt with under the hybrid instrument procedure, as has been much discussed this morning. As a result of the addition of the words EEA mutual society to clause 3in amendment No. 2it is possible that an order made under the clause could impose requirements on a mutual insurer or other EEA mutual society acquiring a UK mutual. That could include, for example, a requirement to give transferring members full membership rights in the holding mutual. If the holding mutual has a unique legal form, that may raise a procedural question of hybridity, as we have discussed.
	The hon. Member for Shipley asked which amendments would comply with EU law. Amendments Nos. 2 to 5 fulfil the dual purpose of extending the scope of the Bill to mutual insurers, as we decided we wanted to do following the comments of my predecessor that the hon. Gentleman quoted, and thereby complying fully with EU law. Amendments Nos. 1 and 6 are necessary as a result of amendments Nos. 2 to 5. I hope that is clear.
	The hybridity provision will ensure that the hybrid instrument procedure of the other place would not apply in the situation I described. It is a standard provision to exclude the hybrid instrument procedure, which will reduce complication and delay in making an order under clause 3. We have had considerable discussion as to whether that is a good thing and in that regard I shall refer to the letter that I think the hon. Member for Christchurch (Mr. Chope) was looking forperhaps he would like to wave it at mewhich makes it entirely clear that if one of the affected companies has a unique legal form, for example if it had been established by a private Act of Parliament, the provisions that we may or may not introduce as a result of the Bill could raise a technical question of hybridity. I believe that it really is a technical question. The important point is that the amendment is merely a precaution.
	I shall be completely honest with the House: at this stage we do not know how this part of the Bill should be implemented. My firm viewand, I believe, the view of the hon. Member for Bournemouth, Westis that it is better to have proper democratic consultation on the specifics of how we can fulfil our aims under the Bill, and to look at all possible options, rather than to exclude, by not having the hybridity amendment, one of the possible options that we may subsequently decide to pursue. No decisions have been taken on the implementation of the Bill. We shall consider and consult on the various ways of implementing clause 3, to achieve the aims of the Bill while protecting mutuals and their members, so including the hybridity provision is mainly a precaution. Our consultation will be extremely democratic.

Christopher Chope: This is the first time I have had the privilege of hearing the Minister speak in her new role. She is obviously very much on top of the issue, and as someone who has much experience of the City of London she will be familiar with the concept of a blank cheque. Is she not asking us, in effect, to sign a blank cheque today? In light of what she has just said, might it not be better for the Bill not to make progress so that the consultations she describes can take place? The Government could then legislate on the matter, in their time, in the coming Session.

Kitty Ussher: No, I do not agree with that. I do not feel that it is a blank cheque. I genuinely feel that technical issues may arise if we choose to implement the Bill in a certain way. We have not decided how to implement it yet, and hon. Members of all parties and representative interest groups can respond to the consultation with arguments that include the question of hybridity if they would like to. When we finally put forward our proposals, we will do so through the affirmative resolution procedure, and those issues can be discussed in that forum. I genuinely believe that that is a sensible way to proceed; it is not a way to stifle debate.

Philip Davies: I would like to pick up on something that the Minister said earlier. She said that amendments Nos. 2 to 5 were required to comply with EU law. Much as I dislike having to pass laws to comply with EU law, I understand the need to do so under our current arrangements, but she said that amendments Nos. 1 and 6 were necessary as a result of those amendments. Would she clarify that point? I understood that amendment No. 1 is not necessary to comply with amendments Nos. 2 to 5. I understand why amendment No. 6 is necessary as a result of the other amendments, but not amendment No. 1. Is it not the case that the Bill could progress with all the amendments apart from amendment No. 1?

Kitty Ussher: That is not my understanding. The amendments address the specific point that my predecessor made in Committee: if one wants to extend the Bill to mutual insurers, there is a corresponding issue of ensuring that the provision is not challenged under EU law, which I think is right and proper. I am simply telling the hon. Gentleman of what I have been technically advised.

Christopher Chope: Will the Minister give way?

Kitty Ussher: I am aware that the hon. Gentleman has had a substantial opportunity to contribute. I shall take one more intervention.

Christopher Chope: I am grateful to the hon. Lady for accepting this final intervention. She referred to the precautionary principle, but since when has the precautionary principle been used by the Government to exclude individual rights, at a time when, by the Government's own admission, they do not know how the Bill will be implemented or how those rights might be adversely affected?

Kitty Ussher: I do not believe that I am excluding rights by addressing the point of hybridity at this point during the passage of the Bill. It is a correction of a potential technical anomaly that may become necessary later on as we consult and work together to ensure that the Bill is implemented in the right way.
	Amendments Nos. 2 and 3 widen the definition of mutual society in clause 3 by inserting a definition of EEA mutual. There has been some discussion of that. An EEA mutual can be a European co-operative society, a co-operative society established in any European economic area state or any other type of co-operative or mutual body as specified by the Treasury in secondary legislation. That will ensure that any changes made under the Bill apply where the transfer is to a subsidiary of an EEA mutual, as well as where the transfer is to a subsidiary of another UK mutual. That incorporates the conversations we had this morning on proposed paragraph (c) in amendment No. 3, and the way in which it would be considered by Parliament.
	In response to the Conservative Front-Bench spokesperson, I can clarify that primary legislation is considered under the affirmative resolution procedure. However, the power in proposed paragraph (c) in amendment No. 3 is subject to the negative resolution procedure, because it simply allows the Treasury to specify other co-operatives or mutuals, including those in other EEA states, to which a UK mutual may transfer. It may need to be exercised at short noticefor example, to specify a new kind of EEA mutual in a potential and live takeover situation. We believe that the negative resolution procedure is appropriate in that case. The power cannot be used to amend primary legislation, where of course it is right and proper that any such changes should be subject to the affirmative procedure.

Mark Hoban: I am grateful to the Minister for that clarification. She listed the three types of EEA mutual. With regard to what we discussed earlier, can she tell me whether that means that non-financial EEA mutuals can merge with a financial UK mutual?

Kitty Ussher: I presume the hon. Gentleman is going back to the wine example. It is not for me to specify which sectors should be pursuing alliances with other types of sectors. It is theoretically possible that the situation he describes may happen, but that does not cause me any concern at all.

Mark Hoban: To clarify, a UK non-financial mutual, which by definition is an EEA mutual, could merge with a UK financial mutual, notwithstanding the provisions in the Bill after it left this House.

Kitty Ussher: That is my understanding. The changes will allow mutuals in other EEA states to take over UK mutuals on the same basis that other UK mutuals may take them over. Only EEA mutuals specified in the Bill or an order made under it may benefit in that way. To reiterate, it is a matter for the bodies concerned to decide whether a particular takeover is appropriate.

Mark Hoban: Clause 3(9) specifies three types of UK financial mutual that could merge with other UK financial mutuals. I think that the Economic Secretary said that a UK non-financial mutual or a financial mutual that falls outside subsection (9) could merge with another financial mutual. That means that, for example, a credit union in the UK as an EEA mutual could merge with a friendly society, building society or mutual insurer. That runs counter to what was said on Second Reading.

Kitty Ussher: My understanding is that the purpose of the proposal is simply to create a level playing field. A foreign or UK credit union could in theory acquire a UK mutual. As they are small bodies, credit unions are probably unlikely to do that, but it is possible.

Lembit �pik: Does the Economic Secretary feel, like me, that we are considering a moot point? If a UK financial mutual wished to merge with a Bratwurst-making co-operative in Germany, a pizza-making co-operative in Italy or a herring-pickling co-operative in Estonia, that would be a matter for them. Nevertheless, the insurance policy is the good business sense of the UK financial institution, plus the necessary requirement for authorisation from its members. Although we can theoretically play games, in practice it is not an issue.

Kitty Ussher: I agree. It is not for the Government to start delving deep into the decisions that essentially private organisations may wish to make.
	Lords amendments Nos. 4 and 5 would introduce the term relevant company into clause 3. That ensures that a mutual society's business can be transferred under the modified procedures to a UK company or a body incorporated in any other EEA state, provided that that company or body is controlled by another mutual society.
	Lords amendment No. 6 ensures that the Financial Services Authority has the power to charge fees for any functions that the Bill confers on it, extending the FSA's existing powers to charge fees under the Financial Services and Markets Act 2000. The extension of clause 3 to EEA mutuals will require certain safeguards, equivalent to those that apply to domestic mutuals for membership rights in the holding mutual and further demutualisation. That answers some of the points that were raised. The FSA may have a role in that and, if additional functions are conferred on it in the order that implements the Bill, it may need to charge fees in connection with them. If the FSA exercises its power to charge fees, that could result in costs for businesses that wish to take advantage of the new procedures. However, any such fees would be paid directly to the FSA and would not exceed the FSA's costs in the transaction in question.
	I was probed slightly further on the power to charge fees, so I shall clarify the matter. Officials in the Department have discussed the principle of fees with the FSA. We will have further discussions at the time of consulting on and making the order. As I said, the FSA's power to charge fees is in the Financial Services and Markets Act 2000. The amendments widen the power to cover costs relating to the new functions conferred under the Bill. The FSA could charge only its costs for ensuring that adequate safeguards are in place. That seems entirely sensible.

Christopher Chope: Will the Economic Secretary give way?

Kitty Ussher: I said that I would not give way again, so I shall stick to that. I apologise.
	I am delighted to commend the Lords amendments to the House.

John Butterfill: I am happy with the Economic Secretary's reply. She has explained clearly and comprehensively the points that have been raised.

Christopher Chope: I was disappointed that, given the time available, the Economic Secretary was not prepared to take my other intervention. If the Bill goes through today, when will it be implemented? It sounds as though there is a long timetable. Has my hon. Friend any idea how long the process will take?

John Butterfill: The last discussions that I had in the Treasury suggested the consultation would take some months, but I cannot be any clearer than that.
	 Lords amendment agreed to.
	 Lords amendments Nos. 2 to 6 agreed to.

Clause 4
	  
	Transfers to subsidiaries: distribution of funds

Lords amendment: No. 7.

John Butterfill: I beg to move, That this House agrees with the Lords in the said amendment.
	The Channel Islands and the Isle of Man were not included within the scope of the original Bill. It is my understanding that it is usual for us to consult them before making legislation that would affect them. It is also my understanding that they have indicated that they would like to be included within the legislation, but no doubt the Minister will able to confirm that. I can see no reason why the Channel Islands and the Isle of Man should be excluded. If the rest of the EEA is includedthey are, of course, outside the EUthey should, as part of the United Kingdom, be included.

Lembit �pik: I feel duty bound to ask whether the amendment, if passed, would make it more difficult for a financial mutual in the United Kingdom to enter into a merger agreement with a kipper-making co-operative on the Isle of Man.

John Butterfill: I doubt it, is the answer. We have heard all sorts of strange suggestions as to who might merge with whom. All such mergers would require approval by the Treasury and the FSA. I am reassured that they are sensible enough to make sensible decisions.

Christopher Chope: Can my hon. Friend tell us when he first approached the Channel Islands and Isle of Man authorities to find out whether they wanted to be included in the Bill and why it was not apparent at the outset, when he first launched it, that they wished to be included?

John Butterfill: I did not approach them myselfI understand that they were approached by the Treasury and asked to be included, but perhaps the Minister could confirm that.

Christopher Chope: Few people would wish to quibble with Lords amendment No. 7. However, I hope that the Minister will both respond to my question about how it came about that those authorities wanted to be included in the Bill at such a late stage and say what she sees as the implications of that. We quite often hear complaints in the House that a different regulatory regime operates in, for example, the Channel Islands or the Isle of Man from that which Parliament imposes here, and that that regulatory regime is often less protective of consumer interests. For example, the other day I attended a breakfast at which the issue of health supplements was raised in that context. Concern was expressed that the Channel Islands' regime for regulating health supplements was rather different from that which applied in the UK. What guarantees can the Minister give that the implications of extending the Bill to the Channel Islands and the Isle of Man are compatible with being able to look after the best interests of individual investors or members of mutual organisations?

Philip Davies: I, too, would like to raise a query that I hope the Minister can address. Lords amendment No. 7 says:
	Her Majesty may by Order in Council provide for any of the provisions of this Act to extend, with or without modifications, to any of the Channel Islands or to the Isle of Man.
	I suspect that that is standard wording for a Bill of this nature. However, I understand that not all the current legislation covering mutuals is so extended to cover the Channel Islands and the Isle of Man. I wonder whether the Minister could touch on which legislation is and which is not, and what implications that might have, as I understand that all previous legislation at least has the capacity to include the Channel Islands and the Isle of Man. Perhaps the Minister could therefore clarify whether the amendment would, as a matter of course, apply to the Channel Islands and the Isle of Man or whether it just means that it could apply them, should they so wish at a future date.

Kitty Ussher: I shall be happy to provide that clarification. My understanding is that the drafters of the Bill had not spotted the fact that other, similar types of legislation applied to the Channel Islands and the Isle of Man. When the Bill was being discussed in the House, during its earlier stages, there was not time to make the necessary consultations. We have a policy not to introduce such permissive extent clauses without consulting those involvedin this case, the islandsfirst. That has now happened and I am happy to confirm that they are content with being included, hence the amendment. I hope that that will answer the point raised by the hon. Member for Bournemouth, West (Sir John Butterfill).
	I also understand that the Industrial and Provident Societies Act 1965 applies to the Channel Islands, and that there are powers to apply the Friendly Societies Act 1992 to the islands and the Isle of Man, which have not been fully used.

Simon Burns: Does the Minister anticipate that Orders in Council will be issued at some point?

Kitty Ussher: My understanding is that this measure will make that possible, but I am not in a position to say whether it will actually happen. However, everyone is happy with the situation.

Simon Burns: Given that the Minister has told us that discussions have taken place with the Channel Islands and, possibly, the Isle of Man, can she tell us whether this point was ever raised either by the Government with them, or by them with the Government?

Kitty Ussher: I know that the islands' authorities were consulted and were content with the proposed amendment. I shall be happy to provide further details at a later stage if the hon. Gentleman considers that necessary.

Christopher Chope: Will the Minister give way?

Kitty Ussher: I will give the hon. Gentleman one last go.

Christopher Chope: Bearing in mind the uncertainty about the timetable, will the Minister tell us whether it will be possible for the Channel Islands and the Isle of Man to implement the provisions of the Bill before the United Kingdom Government implement them?

Kitty Ussher: I am not sure whether that would be possible, but I can see no difficulties arising if it were to happen.

Simon Burns: Will the Minister give way on that point?

Kitty Ussher: The hon. Gentleman is being extremely persistent. I will take one further intervention.

Simon Burns: I am grateful. I was most interested to hear the Minister's response to my hon. Friend the Member for Christchurch (Mr. Chope). Surely neither the Channel Islands nor the Isle of Man could implement the legislation before the British Government had done so, because it would be the British Government's implementation of the different phases of the legislation that would trigger any subsequent actions that might flow from it.

Kitty Ussher: I apologise for not being a world expert on the legal situation relating to the Channel Islands and the Isle of Man. I shall clarify the situation. The amendment will allow the Bill to be extended to the islands. It will be used only if the relevant mutuals legislation is extended, and it will then affect only those mutuals established in the Channel Islands and the Isle of Man. No time frame has been agreed at the moment; that will be sorted out during the consultation period. I must also apologise to the House and clarify that the Isle of Man could not implement the provisions before we had done so.
	I commend Lords amendment No. 7 to the House.
	 Lords amendment agreed to.

Crown Employment (Nationality) Bill

Not amended in the Committee, considered.

New Clause 1
	  
	Appeals

'(1) A person who is ineligible to be employed or hold office in a civil capacity under the Crown by reason of the rules made under section 2 (the rules) may appeal to a Crown Employment (Nationality) Rules Tribunal (the Tribunal) for an exemption from the rules.
	(2) In determining an appeal the Tribunal may recommend to a Minister of the Crown (or any person or body to whom the power has been delegated under section 2(3)) that an exemption to the rules be made.
	(3) The Secretary of State shall make regulations with respect to the composition, conduct and operation of the Tribunal.
	(4) The Secretary of State may not make regulations under this section unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
	(5) The power to make regulations under this section is exercisable by statutory instrument.'.[ Mr. Chope.]
	 Brought up and read the First time.

Christopher Chope: I beg to move, That the clause be read a Second time.
	Before introducing the new clause, which is tabled in my name and that of my right hon. Friend the Member for East Yorkshire (Mr. Knight) and of my hon. Friend the Member for Shipley (Philip Davies), may I apologise to the promoter of the Bill on behalf of my right hon. Friend the Member for East Yorkshire for his absence from the House today? My right hon. Friend was particularly keen to be here because he has always had a lot of respect for the hon. Member for Hendon (Mr. Dismore). He was able to participate in a debate on an almost identical new clause some three years ago, but today he was faced with a dilemma, as a big constituency event about the future of Bridlington hospital is taking place and he felt that he should attend it. The Government have proposals to reduce the activities of that hospital, which is

Madam Deputy Speaker: Order. It is sufficient that the hon. Gentleman has given his right hon. Friend's apologies to the House.

Christopher Chope: Madam Deputy Speaker, my right hon. Friend particularly asked me to say that because the mother of the hon. Member for Hendon lives in his constituency in Bridlington, and he thought that he was serving the family

Madam Deputy Speaker: Order. I have already ruled on this point.

Christopher Chope: I am sure that my right hon. Friend will be satisfied with what I have tried to do on his behalf.
	The new clause has a history. It was debated some three years and four days ago on 15 October 2004. It was drafted by my late and much lamented friend, Eric Forth, who was unable to promote it at that time because he was called away, shall we say, to parliamentary business in the Maldive islands. He therefore left it to my right hon. Friend the Member for East Yorkshire, myself and others to carry the torch on his behalf on that occasion. In case there should be any doubt about plagiarism, I admit that the drafting of the new clause is not my own doing, but that of my late former right hon. Friend, Eric Forth.
	The fact that the new clause has once again been selected for debate shows how it has stood the test of time and relevance. It is important because it also illustrates a sense of fair play and the desire to ensure the rights and freedoms of individuals. That was always right at the top of my late right hon. Friend's agenda. He wanted Parliament to be able to do that on behalf of the people.
	The purpose and effect of the new clause is to provide a counterweight to clause 2. As drafted, the clause gives a Minister or
	any person or body to whom that power has been delegated
	the power to impose new nationality requirements on those seeking employment or office in any
	civil capacity under the Crown.
	The new clause would give anyone aggrieved by the impact of the new nationality requirements the right to appeal to a tribunal for an exemption. That is why it is important to reflect on the new clause today. It involves the setting up of a tribunal and a right to appeal to it. It does not give the tribunal the right to impose its will on the Government; rather, it has an opportunity to make recommendations. It is not an absolute right of appeal, but a modest way of taking some steam out of what may be a bit of a cauldron for individuals who fall foul of the provisions in clause 2.

Philip Davies: My hon. Friend rightly says that the new clause would give the tribunal powers only to recommend to a Minister of the Crown that an exemption should be made. Does he agree that in all likelihood it would be quite extraordinary for a Minister to ignore the tribunal's findings.

Christopher Chope: I accept what my hon. Friend says. The House would be able to put pressure on a Minister if he tried to wriggle out and not accept the tribunal's recommendations. The Minister would have the opportunity to come before the House and set out why he did not agree with the tribunal's reasoning in making the recommendation. It is a necessary safeguard.

Philip Davies: In that case, what circumstances can my hon. Friend envisage in which a Minister might wish to overrule the tribunal?

Christopher Chope: All that I can say to my hon. Friend is that when I had the privilege of being a Minister, albeit a junior one, in a Conservative Government, we always took seriously the rulings and recommendations of appeal bodies. Being a fair-minded person, I would like to think that the present Government, for all their faultsI am delighted to see the Parliamentary Secretary to the Cabinet Office, the hon. Member for Lincoln (Gillian Merron), on the Front Benchwould be minded to accept the recommendations of a tribunal. My hon. Friend tempts me to make a party political point, but I will not do so on this occasion.

Simon Burns: My hon. Friend will notice that in relation to clause 2, with which his new clause would deal, the explanatory notes say:
	Any rules made under this power would have to comply with the requirements both of the European Communities and of the European Convention on Human Rights.
	It would be interesting to know whether they will, rather than would, comply. Does my hon. Friend agree that his new clause, in introducing an appeal system, would increase the likelihood of compliance?

Christopher Chope: My hon. Friend is on to a good point, because it is important, when considering human rights and individual freedoms, for people to have a means of redress if they feel aggrieved. The new clause would enable some right of redress if a person felt aggrieved. In the absence of the new clause, a sufficiently accessible right of redress will not be available.

Simon Burns: In the light of that, is my hon. Friend as surprised as me that the Bill's promoter did not have the foresight to include that protection when drafting it?

Christopher Chope: There hangs a story. When I and others spoke to the new clause some three years ago in this place, it was pointed out that the hon. Member for Hendon had had the opportunity to see the new clause for some considerable time; as I recall, the new clause was tabled in July, and the debate did not take place until October. He therefore had the opportunity to do something about it. In fairness to him, however, he was in a slight dilemma, because he said in that debate that he was neutral about the new clause. It then became apparent that the Government wereto put it mildlyhostile. I suspect that, because he is an ambitious and realistic person, he decided that it would be better not to promote a new clause to which he had heard previously that the Government were hostile. I do not know what his attitude will be today, as I have not had the chance to talk to him about it.

Simon Burns: Given that that was three years ago, many reshuffles have occurred since and the hon. Gentleman has not found preferment, perhaps he will revert to his natural inclinations now, as it would not affect his career one way or another?

Madam Deputy Speaker: Order. Perhaps the hon. Member for Christchurch (Mr. Chope) will confine his remarks to the new clause that he is promoting.

Christopher Chope: Certainly, Madam Deputy Speaker. The issue raised by my hon. Friend the Member for West Chelmsford (Mr. Burns) relates to whether the new clause is likely to find favour with the promoter of the Bill. I am in the dark on that matter, and we will have to wait and see what the hon. Member for Hendon has to say.
	Three years ago, the new clause was welcomed by my hon. Friend the Member for Beaconsfield (Mr. Grieve), who was then on the Front Bench. I hope that it will be welcomed equally by my hon. Friend the Member for Tunbridge Wells (Greg Clark), whom I am delighted to see on the Front Bench today.

Philip Davies: May I drag my hon. Friend back to something that he said earlier? I was intrigued by his observation that the Government of the dayI was not an MP at the timewere hostile to the new clause. Given its rather benign nature and the modest proposals that it contains, will my hon. Friend explain what the objections were?

Christopher Chope: I shall come to that shortly. I am afraid that my hon. Friend will have to wait expectantly for me to remind the House of what happened on that occasion. But, as I have said, my hon. Friend the Member for Beaconsfield was supportive of, indeed enthusiastic, about the new clause, which he considered to be a necessary safeguard for those who might be disadvantaged by clause 2.

Andrew Stunell: Would such a person be an individual who had, say, been excluded from the process of application for a job, or does the hon. Gentleman think that a class of people might be disadvantaged? If it were a class of people, would he have United Kingdom citizens in mind?

Christopher Chope: I did not have a class of people such as United Kingdom citizens in mind, although the hon. Gentleman has raised an interesting point. I had in mind particular individuals who found themselves counted out as a result of the operation of the discretionary procedures in clause 2. I had in mind an individual, which raises the issue of how practical it is for an individual to seek redress unless we insert something rather like the tribunal procedure in the new clause. The hon. Gentleman, however, has raised a much wider issuewhich goes beyond the terms of my new clauseabout the Bill's impact on United Kingdom citizens in general rather than individual aliens, or foreigners, who might be disadvantaged by clause 2.
	My hon. Friend the Member for Beaconsfield expressed the fear that expectations would be raised among the foreign population of this country about the ability to apply for civil service jobs. He feared that when people examined the details, they would find that they were being blocked by a new set of potentially complex Government rules. They might be excluded because of their nationality, which the Government might regard as undesirable or prejudicial to their ability to act impartially or be loyal to the Crown. Butas I think many Members acceptthe fact that someone in this country has a particular nationality does not necessarily mean that he supports the Government of the country of which he is a national. Indeed, the reverse often applies: a person may have come here from Sudan, Burma orespecially in the current contextZimbabwe precisely because he despises and loathes his own country's current regime. The fact that a person is a national of a countryNorth Korea or Iran, for examplethat is on a blacklist should not of itself automatically put them at a disadvantage because the Government regard any national of that country as being a potential threat to our national security.

Derek Conway: I have secured today's Adjournment debate and I have been following my hon. Friend's remarks in my officeI hope he will forgive me for not having followed them from the outset. He is setting out the difficulty that peopleparticularly those foreign to our countrywill have in understanding the proposed legislation and its intent. The Bill is accompanied by helpful explanatory notes, however, but although we can follow the content and purpose of the Bill with the aid of those notes, I am finding it difficult to follow my hon. Friend's arguments closely as all we have to help us is his new clause on the Order Paperwe do not have any explanatory notes on it. Such notes can be circulated in scrutiny Committees, and I wonder whether my hon. Friend mightif not during this debate, then subsequentlyconsider whether it might be helpful to the House, especially on private business days, to have explanatory notes on amendments and new clauses circulated.

Madam Deputy Speaker: Order. I hope that the hon. Member for Christchurch will confine his remarks to the new clause and its contents.

Christopher Chope: Certainly; that has always been my intention. I do not think it is necessary for us to have written documents explaining what the new clause is about, as the House has the benefit of my presence to explain it.

Simon Burns: As we have the benefit of my hon. Friend explaining things, will he explain proposed new subsection (3)? It states:
	The Secretary of State shall make regulations with respect to the composition, conduct and operation of the Tribunal.
	There were problemsin the late 1990s, for examplewith regard to the composition of public bodies, which led to the setting up of the independent Appointments Commission. Why does my hon. Friend want the Secretary of State to make the regulationspresumably that would give the Secretary of State the powers to appoint the members of the tribunalor does he intend that the regulations should specify that the appointments should be made by the AC, so as to avoid any accusations of packing public bodies by one political party or another?

Christopher Chope: My hon. Friend makes a fair and pertinent point. In considering whether to adopt the wording that our late lamented friend, Eric Forth, former Member for Bromley and Chislehurst, proposed, I faced the following dilemma: if we were to try to incorporate the point that my hon. Friend the Member for West Chelmsford (Mr. Burns) makes, that would make it less likely that such a new clause would be acceptable to the Government. Sometimes in legislation, perfection can be the enemy of the good.

Simon Burns: This Government have repeatedly said that they want there to be independent appointments, particularly following the furore over the packing of appointees to NHS public bodies in the late 1990s, so they might not be as averse as my hon. Friend thinks to making such bodies independent, in order that it is seen that they are whiter than white.

Christopher Chope: I hope that the Government have taken that point on board. As my hon. Friend knows, under proposed new subsection (3) it would be for the Secretary of State to make the regulations, and they would be all the better if they were to incorporate all the points my hon. Friend rightly raises.

Derek Conway: I do not wish to belabour the contribution of my hon. Friend the Member for Christchurch; he was clearly trying to be helpful to the Government. However, to pick up on the point that my hon. Friend the Member for West Chelmsford (Mr. Burns) raises on subsection (3), my hon. Friend the Member for Christchurch has included the word conduct in it. Is he aware that some tribunal chairmen tend to feel that they are High Court judges and often try to go much further than the legislation allows them? Has my hon. Friend used the term conduct in order to mean that the Secretary of State would have a mind to what training those chairmen have and that they understand the limits of the powers Parliament has given themor does he have a different intention?

Christopher Chope: I accept the criticism that the word is vague. However, as I said, the Secretary of State would ultimately interpret what we meant by conduct. In the light of the previous debate, it seems that there is a good precedent, at this stage of a Bill, for the Government not really to know what that means. The issue of what we mean by conduct would ultimately have to be decided by the Secretary of State in regulations.

Simon Burns: May I help my hon. Friend? As he drafted the new clause, he will have noticed that under proposed new subsection (4), the regulations that will lay out the composition, conduct and operations of the tribunal will be subject to affirmative resolution, so will have to be scrutinised by this House and another place. Furthermore, the Secretary of State will have to make draft regulations first. There is a problem: regulations in statutory instruments cannot be amended. However, if the Secretary of State produced draft

Madam Deputy Speaker: Order. This intervention is taking far too long.

Christopher Chope: What my hon. Friend is saying, I thinkif I can encapsulate his remarksis that he would like the Secretary of State to make the draft regulations before the statutory instrument came to this House. Although it is not spelt out in the new clause, I certainly hope that the Government would adopt that practice. If we have the opportunity to see draft regulations in advance, there will be the opportunity for consultation on them. Such regulations might be important and far-reaching. Issues might arise about the potential cost of the regulations; that is why we would want to see whether there was a regulatory impact assessment and cost-benefit assessment when they were brought forward in draft. In that way, we could have the fullest debate about them before they came into operation.
	I am sorry that my hon. Friend the Member for Old Bexley and Sidcup (Derek Conway) was not in the Chamber at the outset of my remarks. I should say to him that the whole purpose of the new clause is to introduce the appeal procedure so that an individualwe are talking about individuals, rather than groups
	who is ineligible to be employed or hold office...by reason of the rules made under section 2...may appeal.
	That is important because a national of another country may be one of our country's strongest supporters. There are many examples of that; we may find that the Government have inadvertently put lots of really strong supporters of the United Kingdomwho might even support England in the big match this weekendon the wrong side of section 2.

Simon Burns: My hon. Friend raises an interesting point. He seeks to establish justice through an appeal, but I am concerned about proposed new subsection (2), which states:
	In determining an appeal the Tribunal may recommend to a Minister...that an exemption to the rules be made.
	Does that recommendation add any weight towards making the Minister make such an exemption, or will it be up to the Minister's discretion whether to accept the tribunal's recommendation?

Christopher Chope: I am bound, in a sense, by the text of my own new clause and, as it is drafted, the tribunal could make only a recommendation, whichgiven the meaning of the word recommendationthe Government could accept or reject. However, if we set up the tribunal properly, with the right people who command respect from all sides of the debate, and if they are properly advised, take proper evidence and go into the necessary detail of individual cases, I would hope that any recommendation would be so compelling that it would be almost impossible for a Government reasonably to reject it.

Simon Burns: I am not altogether sure that my hon. Friend, unusually, fully understands how this Government operate. However, might there not be a way round this problem? Might not the Government be persuaded to say in the draft regulations, which will be subject to affirmative resolution, that they will accept all recommendations by a tribunal?

Christopher Chope: The Government could do that, and it might be a way of encouraging a better class of person to take on the role of tribunal member. It is quite often a bit demeaning for those involved in a quasi-judicial process to think that, having heard the appeal, their recommendation might not be accepted.

Lembit �pik: It is of course worth remembering that we are framing this legislation not for this Government but for any Government, so it has to be robust in all circumstances. Did the hon. Gentleman consider framing subsection (2) of his new clause on the basis of making the tribunal's recommendations binding? If so, was there a rationale for why he preferred instead the form of recommendation before usaccepting, of course, that ultimately, precedent rather than the letter of this legislation will determine the tribunal's efficacy in influencing ministerial decisions?

Christopher Chope: I would be being less than frank with the hon. Gentleman and the House if I did not point out that, in deciding whether to retain the wording in the original new clause, it had previously been accepted as being in order and relevant to this Bill. However and as we know, there was not even a quorum in the House when it had to take a decision on it. Rather than tinker with the previous wording, I thought I would be on safer ground in adopting it. Indeed, it is the wording of which the Government and the promoter had had notice on a previous occasion, and they must have been expecting that we would introduce a similar proposal this time. However, I accept that in an ideal world, it would have been open to people to table amendments to my new clause. However, there are no such amendments on the selection list, so we cannot discuss them today.

Derek Conway: I am sorry that we are pressing my hon. Friend on this issueI hope that he is not offended by that. I am not quite sure who the better class of person is to whom he referred. Perhaps my hon. Friend the Member for West Chelmsford (Mr. Burns) is the better class of person whom he wants. May I press my hon. Friend the Member for Christchurch (Mr. Chope) on the point that my hon. Friend the Member for West Chelmsford raised? If a Minister declines to accept the tribunal's recommendation, what happens then? Would the members of the tribunal resign? Would there be another form of appeal? My hon. Friend will understand why the House would like to hear the detail on the consequences of Ministers' actions. As we know, Ministers do not always decide as we would like them to.

Christopher Chope: Exactly, and this is where human factors come into play. The most robust judicial figures in our land would probably say, If we make a recommendation based on evidence after hearing all the parties and Ministers reject it, this is not a role on which we wish to spend our time. We do not want to waste our time hearing cases in detail, only to find that we are overruled.
	If the Government were not to accept recommendations, the ablest people might, ironically, be deterred from continuing in service as members of the tribunal and their places might being taken by cipherspeople more interested in the role's salary than in the opportunity that the post would give to serve the interests of justice and promoting individual liberty.

Simon Burns: That gets back to my original point to my hon. Friend: would it not be better for the independent appointments committee, rather than Ministers of the Crown, to appoints the members of these tribunals?

Christopher Chope: I accept that it would be better. I hope that the new clause will be accepted by the Government and by the House, and that the Government will, in due course, have the opportunity of implementing it on the basis of including a practice direction that they will always accept tribunal recommendations.

Philip Davies: Given my hon. Friend's answer to a previous intervention about the fact that if a tribunal had considered all the evidence in a robust and thorough manner and everybody could see that it was all above board, a Minister would be unlikely to reject the recommendations, does he intend that the tribunal would take evidence in public and that its findings would be made public so that people could hold the Minister to account should he overrule the decision?

Christopher Chope: The issues of whether the tribunal would sit in public, whether the evidence and its decisions would be published and, if so, how, are dealt with in subsection (3) of the new clause. That provision refers to the
	conduct and operation of the Tribunal.
	I would like tight prescription to be set out in regulations on that matter. In answer to my hon. Friend's specific point, I would like that prescription to ensure that proceedings were in public, so that justice could not only be done but be seen to be done.

Philip Davies: This is an important point because the way that clause 2, which the new clause seeks to amend, is drafted means that the provision would apply not only to a Minister overruling a tribunal but to any person or body to whom the power has been delegated. It may well be that it is not a Minister who overrules a tribunal's decisionit could be any unelected and unaccountable bodyso it strikes me that it is even more important that the findings are public, so that we can all see where we stand.

Christopher Chope: Although my hon. Friend is right in saying that the decision coming before the tribunal to be tested may not be that of a Minister, but of someone else to whom the power had been delegated, the tribunal recommendation would, under the provisions of subsection (2) of the new clause, be a recommendation to the Minister rather than to the body that had made the original decision. The Minister would thus ultimately have full responsibility and accountability.
	My hon. Friend is right to say that transparency is an essential part of accountability. I recall going to a court in Scotland when I was a law student. The case was quite a seamy one. My group was sitting in the public gallery, as the High Court judge knew, and it was not long before defending counsel suggested that the court should sit in camera. The lord justice in question, who recently died, sadly, put his feet up on the bench, not just metaphorically but literally, and said, Justice must not only be done, but it must be seen to be done. He gave a big wink to all us students sitting in the public gallery.
	I am very much in favour of this principle of transparency and openness. Normally, the only people who are against it are those who fear embarrassment. There is thus always a motive for the Government to be against it, but we pride ourselves on having an open, honest and fair judicial system in this country. I would hope that those principles would be replicated in the rules for the tribunals that would be made under the provisions of the new clause.

Derek Conway: My hon. Friend's reminiscences about his days as a law student are very interesting, but I wish to press him again on the quality of the people who will be involved and their conduct. I recall once having to give evidence before an employment tribunal at which the chairman went way beyond the terms of reference. He was probably not up to the job, and the lawyers present had to remind him that he was going beyond the scope of the powers that Parliament had given him. Is my hon. Friend concerned about the sort of people who will be running the show? Not only might the Minister who makes the decisions be of varying quality, but so might the person giving advice on exemptions to the Minister not be of a very high calibre. The whole system could be a shambles. Does that worry my hon. Friend?

Christopher Chope: That is why it is important that the composition of a tribunal should be set out in the regulations and, preferably, be the subject of consultation in advance. I do not know whether my hon. Friend has appeared before an industrial tribunal, but in the days when I practised as a lawyer I used to do so. They comprised a chairman, who was normally legally qualified, a representative of the trade union movement and a representative of business. Often, one could see that those people were not working together as a collective. Instead, they saw their role as expressing their own sectional interests. If that were to happen in the tribunals that I propose today, I would be dismayed and disappointed because that is not how a fair tribunal should operate. All the people on the tribunal should be concerned only with ensuring that justice is done, and they should not be drawn from any particular sectional interestsin the same way we do not draw our judiciary from sectional interests and people do not have the right to choose the particular judge who will preside over their case. That principle also extends to juries. We have restricted people's right to choose a jury that they think will be sympathetic to them on some sexual or, dare one say, national or racial basis.

Derek Conway: My hon. Friend makes an important point. If an employer is about to appear before a tribunal and sees that the chairman has a beard, a copy of  The Guardian and plastic shoes, he knows that he is probably in for a hiding. My hon. Friend makes a fair point about the quality of people before whom one might appear. Does he think that those who sit on tribunals should have no declared party political allegiance so that at least the petitioners can be assured of a fair hearing, rather a partisan hearing?

Christopher Chope: There is a difficulty with this. I am in favour of encouraging the maximum number of people to join political parties and participate in the political process. My hon. Friend refers to the laudable objective that everyone who sits on a tribunal should be without allegiance to a political party, but if the consequence of introducing such a rule would be to deter people from participating in the political process or joining a political party, it would be counter-productive. We have reached that situation already in some of the appointments in the NHS. Unless people are members of the political party that is in government, they feel, especially if the Minister is making the appointment, that they will be at a potential disadvantage. Often, people who have a party political interestwho have joined a political party and take an interest in public affairs and the welfare of our great nationhave an important role to play, perhaps on tribunals like the ones we are talking about. They might be party political, but the important thing is that such people, whatever their views, are big enough to be able to suppress their prejudices when it comes to taking decisions

Derek Conway: rose

Christopher Chope: I shall give way to my hon. Friend

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will give way to me. We are in danger of hearing an embellishment too far in terms of the new clause that is before the House. It would perhaps have been better if some of the issues that are now being raised had formed part of another amendment or new clause. I direct the House to have regard to the strict terms of the new clause that is being considered.

Christopher Chope: I am grateful to you for that ruling, Mr. Deputy Speaker. You will be aware of how physically exhausting it is to keep rising and sitting down again

Mr. Deputy Speaker: Order. In which case, the hon. Gentleman will no doubt consider that that also applies to the Chair. Perhaps we will have mutual restraint in that respect.

Christopher Chope: Absolutely. Let us hope so. I abide by your ruling, as always, Mr. Deputy Speaker. I am not going to articulate all the details that would be contained in the regulations which, if I interpret it right, is your concern. Otherwise, we would be here all day, which would obviously be undesirable.

Derek Conway: Obviously we will abide by the directions of the Chair, but in terms of rising and sitting down I note that both the occupant of the Chair and my hon. Friend look in pretty good condition, so this exercise is probably very good for everyone.
	My hon. Friend says that he does not want to be pressed on the detail. I am sorry we are having to do that, but we do not have explanatory notes to new clauses in the way that we do for other Bills, so he will understand why we need to press him to clarify the direction in which he is travelling. Although he will not go into absolute detailthe House will understand whyI hope he does not take offence at the fact that we are pressing him a little on these matters.

Christopher Chope: I would never take offence at anything my hon. Friend did or said. What is important is that the House and the Government, whom I hope to be able to persuade to accept the new clause, know why we have chosen to include the words
	composition, conduct and operation of the Tribunal.
	Those are the three key elements of the regulations to be made under the new clause. We discussed the importance of the composition of the tribunal. The nature of its composition would make all the difference in the world to its effectiveness and authority. That is why there should be detailed regulations relating to that. The conduct of the tribunal would be fundamental to whether the people who appear before it have confidence in it, and whether it is effective and commands public support. The operation of the tribunal is also highly relevant. That is why those three elements have been picked out. The new clause does not say that the Secretary of State cannot make regulations that go wider than that, but any regulations that he does make must include those essential key elements. I hope that that commends itself to the House.

Greg Clark: In promoting the new clause, my hon. Friend has given such an alarming picture of the consequences of the tribunal having people of poor quality or not being able to conduct itself properly that he is beginning to persuade me that the new clause is deficient and should have more specifics on the conduct and calibre of the people involved. Can he reassure me on that?

Christopher Chope: All I can do is say that we are where we are, as Mr. Deputy Speaker said. We have the new clause before us. It is not embellished. No one has sought to amend it by making it more extensive. All one can do is hope that if it is incorporated into the Bill and the Bill becomes law, the Government, who control such things, will ensure that the concerns expressed are reflected in the content of the regulations.

Simon Burns: It grieves me to have to tell my hon. Friend that, like my hon. Friend the Member for Tunbridge Wells (Greg Clark), I am becoming more and more concerned that the new clause does not go far enough. I fear that I shall have to seek to catch Mr. Deputy Speaker's eye to make it clear why there may be deficiencies in it.

Christopher Chope: It would not be the first time I have been accused of having deficiencies. I am the first to accept that nothing in the world is perfect but, as I candidly explained to the hon. Member for Montgomeryshire (Lembit pik), my main concern is to introduce a provision that is in order and relevant.

Philip Davies: I understand the objections that other Members have made, but as at this stage we do not know how many cases would go to a tribunal or how many times it would meet, does my hon. Friend agree that it is difficult to make specific points about its composition?

Christopher Chope: That is obviously an issue. The number of times the tribunal met would depend on how the Government used their powers under clause 2. If they were seen to use their powers fairly, only a small number of aggrieved people would appeal to a tribunal. Of course such a process is always open to vexatious litigants or people who are sometimes encouragedI am ashamed to sayby members of the legal profession who think there is money in it for them too, but such cases would be the exception. However, if the Government were seen to be heavy-handed in the use of their considerable powers under clause 2, there would be a heavy burden on the tribunal, which would eventually lead to additional costs for the taxpayer. In that sense, setting up a tribunal process with costs for the taxpayer would introduce a deterrent against the Government acting in a high-handed and unfair fashion in the exercise of their powers.

Greg Clark: It is uncharacteristic of my hon. Friend to call for what could be a considerable increase of public expenditure, which has to be financed from taxation. He is usually meticulous in avoiding such charges on the Exchequer, so I assume that he has made an assessment of what he considers a proportionate sum for the costs of the provision. What does he think is a reasonable expenditure consequence of his proposal?

Christopher Chope: rose

Mr. Deputy Speaker: Order. Before the hon. Gentleman replies, may I point out to the hon. Member for Tunbridge Wells (Greg Clark) that it will be helpful if he addresses both the Chair and the microphone? Otherwise his words may not be properly recorded.

Christopher Chope: My hon. Friend the Member for Tunbridge Wells asks a pertinent question. As a former shadow junior Treasury Minister, I know how important costs are and how important it is that Opposition parties do not support proposals that might be interpreted by a mischievous Government as suggesting that we were making unfunded spending commitments. I do not think that the costs of the tribunal process would be greater than the costs incurred by not having a tribunal. If there is no tribunal to take the steam out of the cauldron, more people would be dissatisfied and the judicial review process would be used instead. Perhaps the Minister will tell us about that process in due course because when we last discussed the issue the Government line was, Let the people use judicial review, but that is expensive not only for the applicants but for the Government and thus the taxpayer nationally. It can use up valuable resources.

Greg Clark: Will my hon. Friend explain who will pay the costs of the tribunal? Will the litigants be responsible, which might mitigate the costs to the Exchequer, or is it his intention, and expectation, that the costs would be met from central Government?

Christopher Chope: I am afraid that on this occasion, I will have to hide behind the wording of my new clause and say that that will be a matter for the regulations. Regulations could incorporate rules relating to costs, but I had it in mind that normally the burden of costs should be borne largely by the taxpayer rather than the applicant. We are talking about lots of applicants who are applying for what may be quite modest civil service jobs, where the salary might be only a few tens of thousands of pounds. I would not want them to be deterred from exercising their rights and obtaining justice by the knowledge that, were they to be unsuccessful, they would be penalised significantly by costs.
	I understand where my hon. Friend is coming from on the issue of costs and taxpayers' money, but an important balance has to be struck. That is one of the reasons I am so disappointed by the way in which the Government are dealing with legal aid, effectively ruling out access to the legal system for lots of people in our society who are relatively poor. It has almost got to the stage where people have to be extremely wealthy or extremely poor to get access to justice. I would not want my tribunal, as I shall arrogantly call it, to fall foul of that system. I want anybody who is aggrievednot those who are vexatiousto be able to get access, and the costs would have to be borne as part of the overall cost of society and having fair play.

Philip Davies: I am sure my hon. Friend accepts that there cannot be a differential between the cost and the effectiveness of the tribunal. They are part of the same issue. He said earlier that more people would go to the tribunal if the Government were seen to accept its verdict. Is there a danger that the Government would deliberately not accept the verdicts of the tribunal to deter people from going to it, in order to reduce its costs?

Christopher Chope: My hon. Friend is adopting the mindset of a Minister; I congratulate him on that. It is exactly the convoluted approach, with perverse behaviour and outcomes, that Ministers, or perhaps their advisers, often adopt. I hope that we can have more trust in human nature and rational behaviour on the part of the Government than my hon. Friend suggests. I do not want to make any guarantees, but I live in hope. The issue of costs is important, and when we last discussed it, it was the main reason and justification put forward by the Government for not accepting the new clause. However, I would say, What price justice?

Greg Clark: My hon. Friend has made it clear that it is at least possible that the costs might fall on the litigant, but given the terms of his new clause, if the tribunal's decision were not binding on a Minister, litigants would be enticed into a gamble. They could spend large sums of money and win their case, but find that Ministers completely ignored the tribunal's ruling. Should we be enticing people who may be, as my hon. Friend says, quite low paid, to risk their money in that way?

Christopher Chope: I draw my hon. Friend's attention to a relevant analogy, which is what happens under the planning process. If people are aggrieved by a planning outcome, they can seek judicial review, which is an expensive, convoluted process. The result of that review will never overturn the decision and say that the planning permission that was granted is now overturned. A judicial review can only send the matter back for reconsideration. That happens at the moment under the planning process, and it is one of the reasons why I would never advise a constituent to engage in such judicial reviews.
	However, at least under my proposals, the costs will be much less for the applicant than those of engaging in judicial review. I accept the comments of my hon. Friend the Member for Tunbridge Wells that, almost by analogy with judicial review of planning decisions, the outcome will be uncertain because applicants may end up with a pyrrhic victory. They believe that the recommendation has been made in their favour, but then the Government overturn it. At least by that stage, the Government are accountable to the House, the individual Member of Parliament can seek an Adjournment debate on the matter and all the available processes would come into play, including scrutiny by the alert newspapers, which we are lucky enough to have in this country.
	Giving a Minister of the Crown discretion about whether to accept a recommendation drives a coach and horses through matters, and I take the point that the proposal is less than perfect, but it is better than the alternative. Indeed, there is no alternative before us today.
	It is typical of the responsible way in which hon. Members are tackling the matter that they are so concerned about the potential costs and want to ascertain how the process may interact with the people whom it is designed to benefit. Under clause 2, married people may find themselves penalised by their relationship. I appreciate that amendments in the next group could have an impact on the clause. However, when one considers that the status of a spouse may have a critical impact on an individual's ambition to serve in a civil capacity under the Crown, it is important to establish proper safeguards for such people. In a sense, they risk being penalised not for their status, beliefs or nationality but because of the person whom they have chosen to marry. That may have to happen sometimes, but, if so, it should be subject to a right of appeal or review, for which the new clause calls.
	My hon. Friend the Member for Beaconsfield supported the new clause when we previously discussed the measure. He said that it provided a framework of greater fairness and that it would prevent the Government from having free rein in picking and choosing the countries that they would put on a prohibited list.
	Clause 2 gives the Government tremendously wide discretion to outlaw citizens from a range of countries on the basis of a black list, which may have a severe impact on affected individuals. As my hon. Friend the Member for Beaconsfield said on the previous occasion, it would be better to concentrate on the individual qualities of applicants, almost irrespective of their nationality, and consider their ability to serve the country well.
	When we discussed the measure previously, the hon. Member for Hendon, the promoter, was dismissive of the new clause, saying that those who supported it were not genuine supporters of the Bill. That did notand does not, I believeapply to my hon. Friend the Member for Beaconsfield because he said that he could see some good in the Bill overall. I can see some good in the Bill overall, but I can also see a lot in it that is bad. I am concerned to try to make it better and fairer than it would be without the inclusion of new clause 1.
	On the previous occasion, it was said that judicial review would be available and that that would be sufficientI anticipate that the Minister might have the same brief as her predecessor did three years ago and say that we do not need the provisions in the new clause. The argument was put then, and no doubt it could be put now, that the judicial review process had been streamlined and that there were now effective mechanisms for settling cases prior to the hearing taking place. However, if one wants a recent example of the reality of judicial review, one does not need to go further than the case reported in the papers in the past 10 days of the challenge to the distribution of the Al Gore film to our schools. An individual took that case to judicial review. Although I do not have first-hand knowledge of it, my understanding of what was contained in press reports is that bringing the case to judicial review could have cost the challenger up to 200,000. If he had lost the case, not only would he have had to pay that 200,000 but he would have been liable for the Government's very considerable costs.
	We do indeed have a new judicial review process, which can be used by the Government, but it is too rarely used by the Government. It could have been used by the Government in that case, because at the end they seemed to be quite satisfied with the outcome, although the taxpayer ended up paying the best part of two thirds of the costs of the challenger, as well as the costs of trying to resist the challenge. However, not many people who seek a position in the civil service will risk such large sums of money in the judicial review process. I therefore do not think that the judicial review argument, which the Minister might deploy, is an effective argument against the new clause.
	There it isthe new clause is not perfect, but it would certainly have a beneficial impact on what would be the unfair provisions in clause 2.

Greg Clark: My hon. Friend must forgive me for not being on the Front Bench in the Committee stage of the Bill, but can he brief me on whether the Human Rights Act 1998 offers some protection to people who might be disadvantaged by the decisions of Ministers?

Christopher Chope: Although I am member of the Parliamentary Assembly of the Council of EuropeI am delighted to see the former leader of the British delegation, the hon. Member for Manchester, Central (Tony Lloyd), in his place; he might be able to help us on thismy understanding is that in order to exercise one's rights under human rights legislation in this country one would need to go to court. That means that one would effectively open oneself up to exactly the same potential costs as going to judicial review. One might then seek to go the European Court of Human Rights in Strasbourg. However, I believe that at the last count the list of cases waiting for determination there was about 100,000, so one would not be guaranteed very speedy justice, and by then the job opportunity might have gone somewhere else.

Greg Clark: I am grateful to my hon. Friend for that clarification, but at least the Human Rights Act 1998 is judiciable in the British courts. Should we not be sceptical about proliferating these bodies? If there is already a court that is qualified to address and redress some of these concerns, we should make use of it, rather than seeking to replicate it.

Christopher Chope: The extension of that argument would be to say that the whole of the employment tribunal process should be curtailed and that all those cases should be dealt with by the human rights court. That would be a solution, and it might also be cost-effective, in that it would result in far less activity taking place. It would mean that most of the present tribunalsthe social security appeals tribunal and all the rest of themwould be put out of business and people would be told to have their grievance dealt with under the human rights legislation.
	I do not think that that would be appropriate in the context of where we are at the moment, however. I am proposing a tribunal because that is the system that we have now. I am looking forward to the arrival of a radical Conservative Government, however, and if such a Government wanted to consider a complete root and branch reappraisal of these matters, this question could be included in such a reappraisal. But I would be concerned if this area did not have a tribunal while we still have tribunals for all sorts of other areas in which individuals feel aggrieved about the way in which they have been treated, especially in relation to employment issues.

Philip Davies: I agree with my hon. Friend, but does he acknowledge that such a root and branch reform could involve a future Government scrapping the Human Rights Act altogether? In those circumstances, if there were no tribunal, people would be left with nowhere to go. It is important to embed provisions in this legislation in case that should happen in the future.

Christopher Chope: As always, my hon. Friend makes a good point. Those of us who would like to see the Human Rights Act repealed could find that the argument for repealing it would be undermined by the fact that we had adopted the Act as a way of providing a remedy for people aggrieved under the conditions of clause 2.
	I do not think that human rights issues can be satisfied by not having a tribunal. Indeed, the only way I have been able to determine for satisfying them is to ensure that people have a right of redress and a right of review so that their case may be heard again. In that way, we should not have government by ministerial fiat that would affect an individual's right to engage in employment. Some people might not want to apply for such redress, because they might realise that their CV made them completely inappropriate for the job for which they had been turned down, or because they might not wish to engage in the vetting procedures that might be applied to them.
	The existing provisions in clause 2 will result in a lot of hard casespossibly an enormous number, depending on how the Government interpret and act on those provisions. Even if there are only a few cases, however, I believe that it will be worth while setting up a system that would enable those aggrieved people to have recourse to justice. I therefore have great pleasure in urging the House to give the new clause a Second Reading.

Andrew Dismore: I am rather surprised that we are debating this matter today. Throughout the Bill's passage, we have tried to engage constructively with those who had concerns about it, and this issue was not raised in Committee. Furthermore, I believe that we have answered the questions that were raised at that time pretty effectively in the next group of amendments. I am therefore left with the suspicion that this is a tactic to talk the Bill out. The hon. Member for Christchurch (Mr. Chope) and other Conservative Members have blocked the Bill for the past five years. Opposition Front Benchers have supported it in the past, but in the light of the tactics that we have seen their Front Benchers employing today, I doubt that their official position is being defended by those Members.

Greg Clark: I should like to reassure the hon. Gentleman that the Bill has the full support of those on our Front Bench. Indeed, my interventions on my hon. Friend the Member for Christchurch (Mr. Chope) probably caused him some disappointment, because I cannot share the enthusiasm that my hon. Friend the Member for Beaconsfield (Mr. Grieve) had for this proposal. I am largely in agreement about the deficiencies of the new clause, so, in terms of the new clause and the Bill, the hon. Gentleman and I are on the same side.

Andrew Dismore: I hear what the hon. Gentleman says, but those who read the  Official Report will form their own views of the conduct of the debate so far.
	Throughout the whole process, I have tried to engage constructively with the right hon. Member for East Yorkshire (Mr. Knight) and the hon. Member for Christchurch. I have kept them fully informed of discussions and negotiations between myself and the Government, and given them early notice of any proposed amendments. As I said, I am surprised to have this new clause sprung on me today.
	The new clause can be easily and quickly answered. In fact, it can be answered so easily that I am rather surprised that it has been selected for debate. It simply does not match, though I am not criticising

Mr. Deputy Speaker: Order. The hon. Gentleman has expressed a criticism, but he must know that the selection process is beyond reproach. If the new clause has been selected, it is wholly in order to debate it.

Andrew Dismore: I was about to say that I fully accept that. I was merely expressing my surprise that the new clause was selected; of course, I was not criticising the selection process. The reason why I expressed surprise is that the new clause simply does not fit the structure of the Bill. The Bill's purpose is not to identify a particular group as excluded from employment on account of their nationalitybecause they happen to be from Somalia, in the example that we have heard. It is not intended to exclude any particular individuals from employment. The Bill relates to posts, not persons. The Bill operates by saying that a particular group of postsa much smaller group than at presentshould be reserved for UK nationals, with the rest of the posts available at large for anyone to apply for. In respect of those posts, no one is excluded on grounds of nationality, though appointment will be subject to the usual interview process that anyone applying for any job typically goes through.
	The entire superstructure of the new clause is completely erroneous and misconceived. Nobody would be able to use new clause 1 because nobody would be ineligible in the way it describes. The provision simply does not match clause 2 in any way, shape or form. If it referred to classes of posts, it might perhaps be relevant, but as the Minister is likely to point out later, the way to challenge that may well be by judicial review of the regulations rather than by individuals pursuing the case. No particular individual will be disadvantaged in the way suggested by the proponents of the new clause.
	Foreign nationals feel aggrievedvery aggrievedby the existing rules. The purpose of clause 2 and the Bill as a whole is to expand those rules to ensure that only jobs that it is absolutely necessary to reserve for UK nationals are so reserved. The Bill will extend, not restrict, the rules so that people with a legitimate desire to work for the civil service, for example, will not be excluded artificially by rules that are simply irrelevant to the particular post in question.
	Judging from the debate so far, I suspect that opposition to the Bill, which is exemplified by the attempts of Conservative Members to talk it out today, is based on xenophobia rather than common sense. I have to say that the Bill has been blocked for five consecutive years by the hon. Member for Christchurch and one or two of his hon. Friendsapparently in the face of opposition from their Front Benchers, who clearly have no control over their Back Benchers. So be it. It has been blocked for five years running and it looks as if it will be blocked again today. There is a tendency to quote Arnold Schwarzenegger these days, so I simply say that if the Bill fails today, I'll be back.

Lembit �pik: rose

Mr. Deputy Speaker: Order. It is always helpful if the hon. Member for Hendon (Mr. Dismore) indicates that he is giving way. Otherwise, if he simply sits downprematurely, if I may say so, for himthere may be some confusion.

Lembit �pik: I am surprised, but grateful to the hon. Member for Hendon (Mr. Dismore) for giving way, as I thought that I was about to have to make a speech. I know that the hon. Gentleman believes that we are witnessing a filibuster, but can the new clause not be interpreted as enabling a person who is ineligible to be employed for a particular post to appeal against the block?

Andrew Dismore: Given the way in which it is phrased, it certainly could not. As for why that is the case, the answer is in the earlier comment by the hon. Member for Christchurch: this is a hand-me-down new clause prepared for the late Eric Forth, for an earlier version of the Bill several years ago. The hon. Member for Christchurch simply has not done his homework: he has not read the Bill as it now stands and as my and the Government's proposed amendments would take it further forward, and has not proposed an amendment that fits the Bill.

Christopher Chope: Although the hon. Gentleman might anticipate the approval of his amendments in the next group, we cannot discuss new clause 1 as if those amendments had already been passed.

Andrew Dismore: But of course I must anticipate that the amendments will have the hon. Gentleman's support, because they were tabled to answer the criticisms that he made in Committee. Even without those amendments, however, the new clause does not fit the Bill, because the Bill deals with posts, not persons. An abstract unfilled post cannot apply to a tribunal, which is the only way in which the clause could operate. It is all absolute nonsense, and the hon. Gentleman, who is a lawyer, ought to have done his homework properly. If he wants an appeal mechanism, he ought to put forward a new clause or amendment that achieves his desired objective, which this new clause manifestly does not. It simply does not fit the Bill.

Lembit �pik: Having looked at the new clause, let me say that the decision to select it for debate is beyond reproach. There is a reasonable debate to be had about the case for a tribunal. Apropos of my question to the promoter of the Bill, it seems from his explanation that the new clause is incorrectly worded and therefore does not provide a mechanism for challenging decisions about which positions can be applied for by foreign nationals and which cannot.
	I very much enjoyed the 70-minute contribution of the hon. Member for Christchurch (Mr. Chope); my only regret is that it was finite. Nevertheless, he made the case for the principle of a tribunal. Would the hon. Member for Hendon therefore have accepted a clause that introduced a tribunal that really did provide a mechanism for considering whether particular posts should be opened up to foreign nationals?

Andrew Dismore: The real problem is that that is an abstract concept. The only way in which an individual could be affected is through the vetting process. If the hon. Gentleman is suggesting that a tribunal should consider the vetting processthe only means by which an individual would be excludedhe would be on dangerous ground, especially as the hon. Member for Christchurch has an amendment in the next group that would take out the vetting process.

Lembit �pik: I was not suggesting that, and it would be hard to understand how a tribunal about vetting could operate meaningfully without straying well beyond what any reasonable person would regard as the sharing of confidential information.

Philip Davies: I am puzzled that the hon. Member for Hendon (Mr. Dismore) says that clause 2 applies only to posts, not people. Clause 2 clearly states:
	Rules may be made imposing requirements as to nationality which must be satisfied by a person.
	Nationalities are made up of people, not posts, so the tribunal would be there in case anyone was disadvantaged. Does the hon. Gentleman agree that that is necessary?

Lembit �pik: There is a slight risk of a semantic debate, which probably goes beyond what is useful for this discussion. I leave it to the hon. Member for Hendon and the Minister to respond to that. I can see the case for some kind of tribunal system or mechanism to re-evaluate whether particular jobs should be open to foreign nationals. This clause does not seem to do that, but I would be interested to hear the official Government position.
	The clause is less important than the fundamental purpose of the Bill, which is to provide a more generous opportunity for foreign nationals to operate in a civil capacity under the Crown. Surely that is long overdue. It would be a great shame if we were to embroil ourselves in argument over this clause and then throw the baby out with the bathwater.

Simon Burns: Although I welcome the debate, it puts me in something of a quandary. I am usually a strong supporter of my hon. Friend the Member for Christchurch (Mr. Chope), but I fear that in his new clausewith which I have considerable sympathyhe has not shown the robustness that we normally associate with him.
	I think it absolutely right for there to be an appeal mechanism. In recent years we have seen too many abuses by Government, too many instances of their running roughshod over people's civil liberties. I believe that when legislation is as crucial as this and has such a direct impact on the lives of individuals, there should be a right of appeal to redress any wrong decisions that have been made, and in that respect I wholeheartedly support what my hon. Friend seeks to do to improve the Bill.

Lembit �pik: I am sure the hon. Gentleman will recognise that although that may be the intention, it is not what the new clause would achieve. It refers to
	A person who is ineligible to be employed or hold office.
	In other words, it makes the assumption, as a given, that the person is ineligible. Surely the most generous interpretation of the new clause is that it applies only to a decision on whether foreign nationals should be barred from a particular post.

Simon Burns: I understand the hon. Gentleman's point. My point is that I believe in principle that there should be an appeal mechanism. If the new clause is badly drafted and needs to be improvedas I shall explain, I think it is badly drafted in other respectsthere should still be time to remedy that deficiency. We should not pass a law that is deficient by reason of the exclusion of what my hon. Friend is trying to do, simply for the sake of passing the law. Too much law has been passed that was bad law from the outset, with the result that we have had to come back to repair the damage.
	We should congratulate my hon. Friend on the initiative that he has taken with the aim of improving a Bill, but I fear he has not been robust enough. I agree with my hon. Friend the Member for Tunbridge Wells (Greg Clark) that there are deep flaws in the wording of the new clause. I shall briefly explain my concerns about what my hon. Friend has done, although I do not question his motives. Indeed, I am trying to be helpful to him.
	I am very concerned about subsection 2, which I mentioned earlier in an intervention. Although
	the Tribunal may recommend to a Minister...that an exemption to the rules be made,
	nothing in the new clause suggests that the Minister would have to accept that recommendation. I consider that to be a fatal flaw, which could drive a coach and horses through my hon. Friend's intentions, if I have understood them correctly. We have seen other examples of Governments ignoring recommendations that have been made in good faith and probably for the right reasons, but have been unpalatable to Ministers. I would have preferred the new clause to place a statutory obligation on a Minister of the Crown to accept what a tribunal determines.
	Subsection 3 also causes me grave concern. It states:
	The Secretary of State shall make regulations with respect to the composition, conduct and operation of the Tribunal.
	The element about which I am unhappy is the composition. We have seen circumstances in other areas of government in which boards and bodies have been stacked with, in effect, placemen of the ruling party. Evidence shows that in the late 1990s, national health service trusts and strategic health authorities were packed with Labour placemen. Even the Government accepted that, de facto, by setting up the independent Appointments Commission. I fear that if it is left to a Secretary of State to make the regulations for the tribunal, we may see placemen of the Secretary of State's party making appointments that are suitable to him, but are not in the best interests of natural justice.
	For that reason, I would have preferred the proposed measure to have specified that the independent Appointments Commission, rather than the Secretary of State, should sort out the composition of the tribunal. That would have improved and enhanced the organisation and given it greater transparency and independence, and people would have had more confidence in its decision-making processes.

Philip Davies: I have a great deal of sympathy with my hon. Friend's point. However, is it not the case that under the new clause as currently worded, the Secretary of State has the freedom to allow things to be done as he wishes?

Simon Burns: My hon. Friend anticipates my next point, which shows his customary perceptiveness.
	Proposed new subsection (4) gives the Secretary of State the power not to
	make regulations under this section unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
	I congratulate my hon. Friend the Member for Christchurch on stipulating that the mechanism must be employed under the affirmative resolution of both Houses of Parliament. All too often under this Governmentand, to be fair, under the Conservative Governmentthere has been a slip into the habit of introducing all secondary legislation under the negative procedure. As we know, under the negative procedure Parliament has much less ability to monitor and scrutinise the Government's proposals than under the affirmative procedure. Therefore, the affirmative procedure is a plus.
	However, I do not think that proposed new subsection (4) is the panacea that my hon. Friend the Member for Shipley (Philip Davies) hopes it is. It states that the Secretary of State should produce draft regulations to be subject to the affirmative procedure, whereas it should state that the Secretary of State should produce draft regulations prior to the draft regulations that the House will approve, so that we have an opportunity to discuss the draft regulations before they are put before the House in draft form. A key problem with secondary legislationstatutory instruments and regulationsis that they are unamendable once they have been produced in draft form for consideration in Committee. One either has to accept them in their entirety, or reject them in their entirety.
	I have no doubt that the draft regulations that would emanate from this new clause would contain much that Members would agree with, but I suspect there would also be parts that we strongly disagree with, particularly on the composition of the tribunals. However, it would not be possible to remove them in isolation or seek to amend them, because of the way in which secondary legislation operates in this House. That is why there should have been another proposed subsection saying that drafts of the draft regulations should be produced first, for considerationin line with the Government's positive move to start producing draft legislation that is considered in Committee before it is introduced to the House as a Government Bill.

Christopher Chope: I understand my hon. Friend's argument, but unless the Government were bound to accept the results of the consultation on their draft regulations there would not be much point in having them, because there could be draft regulations but the subsequent regulations could still be in a form that my hon. Friend would dislike.

Simon Burns: Logically, my hon. Friend is correct. However, one would hopeand with this Government one does have to live in hopethat when the drafts of the draft regulations were produced, consulted on and considered by Members in all parts of the House, the force of any argument against the original draft regulations would persuade the Government to think again.
	My hon. Friends may call me naive, but in one way time may be on our side. As we all remember, in the past three months the new Prime Minister has said that he wants to be a listening Prime Minister. If that spoken desire is carried to its logical conclusion, he should be prepared to think again if hon. Members come up with cogent and valid reasons on why something in a draft regulation is wrong; in such circumstances, the Government should be amenable to changing it. I hope that having the regulations in draft so that we can consider them before they are put to the House would be a step forward. It would be a way to make changes. The other, more negative answer to my hon. Friend the Member for Christchurch is that that is the only thing that we can do; the mechanism is by regulation, which by definition means secondary legislation. As I said, the only way to deal with secondary legislation is to accept it in its entirety or reject it in its entirety, and we probably would not want to do that.
	I have explained why I have misgivings about the nuts and bolts of my hon. Friend's new clause. There is considerable scope to tighten and improve on the valid and sensible ideas and principles behind his proposals.
	In conclusion, I should add that in respect of clause 2 as currently drafted, my hon. Friend is helping and strengthening the Bill with his new clause. As well as explaining what clause 2 proposes to do, the explanatory notes say that
	Any rules made under this power would have to comply with the requirements both of the European Communities and of the European Convention on Human Rights.
	As long as the European convention on human rights is enshrined in our law, we have to ensure that legislation complies with it, and providing those valid safeguards for individuals who might get caught up with the law will help in that process. They would have the right of appeal to press their case, and the tribunal would have the power to make exemptions, if, on investigation and having heard the case, it felt that that was warranted.

Christopher Chope: Is my hon. Friend not in danger ofI say this hesitantlyconfusing the process and the substance? The European convention on human rights is about the process of ensuring that there is fair play, but my new clause is designed to deal with the substance of an individual's particular circumstances and case.

Simon Burns: I take my hon. Friend's point fully on board and agree with it. I am just saying that I hope that he will achieve two things with his new clause: first, that it will fulfil the very purpose that he says it is for; and secondlymy pointthat it will help make the legislation more compliant and compatible with the European convention on human rights.
	For those reasons, I am in a quandary about what I would do if the new clause were pressed to a Division. As I said, I support the principle behind it, but have misgivings about the detail. I shall have to listen carefully to the Minister before making up my mind about whether I can support my hon. Friend, as I usually do.

Philip Davies: I have followed the debate with great interest; it has been fruitful, despite the concerns of the hon. Member for Hendon (Mr. Dismore). It has been useful in teasing out some of the issues in respect of the Bill.
	We have to take the new clause in the context of clause 2, which gives the Government wide-ranging powers. The hon. Gentleman was uncharacteristically uncharitable and misguided in thinking that those who are trying to improve the Bill are doing so out of xenophobia. I have a great deal of respect for him, and I am sure that he welcomes parliamentary scrutiny of legislationthat is, after all, what we are here for. As it stands, clause 2, as I said, does give wide-ranging powers to Ministers.
	As the hon. Gentleman made clear earlier, the Bill is designed to extend the pool of people from which the civil service can draw, and new clause 1 is a very useful way of delivering on the objectives that he had in mind when drafting the Bill.

Lembit �pik: Obviously, every debate is important, but which is more important to the hon. Gentlemana thorough debate of this new clause or the passage of the Bill? In other words, does he think this new clause so important that he is willing to lose the Bill today in pursuit of debating it?

Philip Davies: What I am concerned about is parliamentary scrutiny. I do not want a deficient Bill to go through this HouseI want the Bills that go through to be robust and to stand the test of time. If a particular Bill cannot meet that requirement, I do not want it to be passed; I want only those that are fit for purpose to be passed.

Christopher Chope: Does my hon. Friend accept that the issue is not whether the Bill is going to be lost today? Only now is it reaching the end of its proceedings in this House. It needs to go to the other place, and we will prorogue at the end of this month, so it is totally unrealistic to think that it will get on to the statute book this Session, anyway.

Philip Davies: My hon. Friend is absolutely right and as the hon. Member for Hendon made clear, if the Bill does not go through during this Session, he will bring it back at some future stage. Perhaps the House is doing him a service today by making sure that when he does bring it back, if he takes into account all the points that have been made, there will be no need for it to be so delayed. I suspect that, contrary to the point made by the hon. Member for Montgomeryshire (Lembit pik)that this debate is causing the Bill problemsit is helping it in the long run.

Lembit �pik: I was simply trying to establish how important new clause 1 is to the hon. Gentlemanthat is all.

Philip Davies: I am grateful to the hon. Gentleman, who is obviously sat there in anticipation of my remarks. Should he allow me to progress, I will be able to tell him how important new clause 1 is to me. As someone who has signed up to it, along with my hon. Friends, I can tell him that I consider it very important to the Bill. I very much hope that, should he get the chance, my hon. Friend the Member for Christchurch (Mr. Chope) will press it to a Division, because it goes to the heart of what we are trying to achieve through the Bill.
	The new clause has to be seen in the context of clause 2. There is a slightly muddled position, in that clause 1 allows for a free-for-all in opening the civil service up to people from foreign countries, yet clause 2 is quite restrictive, undoing all the work of clause 1. Given that the Bill's purpose is to extend the pool of people from which the civil service can draw, new clause 1, which enables a tribunal process to take place should somebody be determined ineligible to apply for a job or hold a post, is absolutely crucial. The new clause would extend the range of people who could enter the civil servicesomething that those who support the Bill would surely welcome.
	My hon. Friend the Member for Christchurch has been typically frank with the House in saying that he himself does not consider the new clause perfect in every respect. I do not think it perfect in every regard either, and my hon. Friends the Members for West Chelmsford (Mr. Burns), for Tunbridge Wells (Greg Clark) and for Old Bexley and Sidcup (Derek Conway) made some very powerful points about its possible shortcomings. However, what the House must decide today is whether the Bill is better for adding the new clause, even though it may not be perfect. My point is that although the new clause may not be perfect, it helps the Bill. The new clause is important, because in our system of justice it is vital that when decisions are being made about people's lives, a transparent appeal process exists so that they can see that decisions are above board and that people have not been unfairly discriminated against.
	I was curious when my hon. Friend the Member for Christchurch said that the new clause had received such objection from the Government when brought to the House before, because it strikes me that the new clause is limited in scope. It still gives the Secretary of State great powers and involves the making of recommendations only, which are not binding on the Government. I do not see why they should be so upset about a modest and benign proposal.
	We have had a robust discussion about whether the tribunal should only be able to make recommendations to the Minister and whether its decisions should be binding. I was persuaded by the powerful case made by some of my hon. Friends that decisions should be binding on Ministers. Notwithstanding that, the issue that we must decide is whether to accept the new clause in its current form or decide not to have a new clause at all. Having an appeal mechanism that can make a recommendation to a Minister is better than having no new clause, as that would have no influence whatever.

James McGovern: The hon. Gentleman has said that the purpose of our being in this place is to scrutinise legislation, and that he wants legislation that will stand the test of time and scrutiny, but he admits that the clause is imperfect. Does he not regard that as a contradiction in terms?

Philip Davies: The hon. Gentleman makes a good point. In an ideal world, perhaps the new clause would be improved, but the decision that we must make today is whether we adopt this new clause or have no new clause. Such is the nature of the decisions that we must make. I am simply trying to make the point that the new clause, although imperfect, is better than no new clause.

Lembit �pik: The hon. Gentleman has said that he wanted to ensure that the Bill was completely right before it was passed, but now he is saying that he would be willing to vote in favour of an imperfect clause. I ask him to help me understand that.

Philip Davies: I have made it clear to the hon. Gentleman that I would prefer the Bill to be perfect, but the opportunity to have that is not before us today. We must work within the confines of what we are dealing with: whether or not to accept new clause 1. My contention is that, although imperfect, it is better to have it than to have no new clause. That is the only decision that we are in a position to make, which is why I hope that my hon. Friend the Member for Christchurch will decide to press the matter to a Division. I would prefer it if we did not have to do that and if everybody in the House were to accept the addition of new clause 1.
	On the question whether this provision should be for a recommendation, in an ideal world the tribunal would have more powers, but providing for a recommendation is better than having nothing at all. I am concerned about the scope of clause 2, which allows any person or body to whom the power has been delegated by a Minister of the Crown to make these decisions. We know that we live in an environment where the Government have introduced more and more quangos into the system and where decisions are increasingly being made by unelected and unaccountable bureaucrats. The scope of the Bill, as drafted, will allow such people to make the decisions about whether or not requirements are made to prevent people of certain nationalities from taking jobs.
	That wide-ranging power will involve a lot of people making those decisions. Given that the scope of the Bill allows so many people in unaccountable and unelected positions to make such decisions, it is all the more important to have a tribunal appeal service that allows some consistency to be applied in those decisions and ensures that the system is seen to be fair. As drafted, the Bill may well mean that people in one unelected body that has been given powers by the Minister make a decision on one basis and another such body makes a completely different decision on a different basis. An appeal procedure that involves a tribunal will allow decisions to be seen to be consistent across different areas of Government and ensure that everyone can see that a decision has been fair.
	New clause 1(3) relates to the composition, conduct and operation of the tribunal and it has generated considerable discussion and controversy. I understand the concerns of people who do not want the Secretary of State to make the regulations. I have long argued that Bills should not allow Secretaries of State a blank cheque to make decisions that are not tightly regulated by the House. On that basis, I would normally have some concern about the provision. However, given that we do not really know how many cases will go to a tribunal, or who will be best placed to serve on it, it is right that at this stage we allow a certain degree of flexibility in the new clause. We should not tie the Government's hands too far. Although in principle I accept that the Secretary of State should not have too many powers to decide who is on the body, what it will do and how it will do it, we need some flexibility, given that this body is being set up for the first time. Therefore, I am content that the new clause would allow the Secretary of State to make those regulations.
	My hon. Friend the Member for West Chelmsford was right when he said that new clause 1(4) contains some safeguards. It provides that drafts of the regulations must be
	laid before and approved by a resolution of each House of Parliament.
	Even though he was right to say that he was concerned about the power that the Secretary of State would have under the new clause, that is a useful buffer to prevent him or her from making decisions that are not fair or transparent.
	Broadly speaking, most people seem to support the Bill. However, it needs to be improved to ensure that it is fair and thatin the good old British traditionit is seen to be fair. My hon. Friend the Member for Tunbridge Wells mentioned the point about whether it was necessary, given the existence of the Human Rights Act 1998. I know that the hon. Member for Hendon is an enthusiastic supporter of that Act, butas my hon. Friend the Member for Christchurch saidsome of us wish to see it repealed. We cannot therefore rely on it to be the safeguard in every eventuality for every piece of legislation. We have to have things in place to protect people when the Act is repealed, as I would like it to be. It is important not to rely on legislation that we do not support, and that we put in place other mechanisms to ensure fair play.
	The other objection that my hon. Friend the Member for Tunbridge Wells made was about costs. I understand that entirely, as I would not wish to incur unnecessary public expenditure. However, it is important to have an appeals process and it would not cost a considerable amount in the scheme of Government expenditure. A modest cost for a tribunal that ensures fair play is important.

Edward Leigh: My hon. Friend is being unfair on himself. I suspect that the cost of his proposal would be extremely modest compared with the very large sums lost in inefficiency and waste in even one Department.

Philip Davies: I am grateful to my hon. Friend for his intervention. In his role as Chairman of the Public Accounts Committee, there is no one better in the House at ensuring that money is properly spent. He is absolutely right that any costs incurred by the new clause would be modest in the scheme of Government expenditure. If the Government are so concerned about waste in the public sector, I am sure that there are far better targets with far bigger rewards than this modest tribunal.
	We need an appeals tribunal to ensure that the rules are fair. Although the cost objection is understandable, it is a red herring, because the costs would be incredibly modest. I invite the House to support the new clause, despite the reservations expressed, because it would improve the Bill and make it more likely to gain support in both Houses of Parliament.

Greg Clark: I congratulate the hon. Member for Hendon (Mr. Dismore) on getting the Bill to this stage. I regretted his suggestion that my party and I are not entirely in favour of it. Unlike the hon. Gentleman, I have no interest in spending the whole of a Friday in a sport to block good legislation. The record will show that the questions I asked of my hon. Friend the Member for Christchurch (Mr. Chope) were pertinent and took up no more than a few minutes. When something that is flawed has been selected for debate, we have a responsibility to scrutinise it. The hon. Gentleman will find nothing in the record to suggest that I have done that in an excessive way.
	I am in favour of the Bill. If it does not succeed today, I hope that the hon. Gentleman will come back with it, as he said he would, and that he might persuade the Government to adopt it and put it in the Queen's Speech. It deals with an anomaly, and I agree that it is a ludicrous situation. I hope that we will make some progress on that.
	However, as I foreshadowed in my interventions, I am afraid that I will disappoint my hon. Friend. I cannot maintain the support that my hon. Friend the Member for Beaconsfield (Mr. Grieve) gave to the measure when it last appeared before us. I am concerned that the new clause is flawed on two counts. The tribunal would lead to a proliferation in the number of public bodies. I am opposed to that. We have quite enough as it is. As was evidenced by the failure to secure even the broadest estimate from my hon. Friend the Member for Christchurch as to what the financial implications of the measure would be, it is unclear how much the tribunal would cost and who would pay for itthe litigants or the taxpayer. We cannot be led into supporting a measure that would have those consequences.
	It is not terribly clear to me even after my questions as to how necessary the tribunal would be. We have the Human Rights Act. I thought that we might have missed something in Committee, but with due respect to my hon. Friend, it was pretty unclear from his response then how the justiciability of the Human Rights Act would affect these matters and whether we are duplicating a protection that already exists to people who might have considered themselves to be disadvantaged.

Christopher Chope: Perhaps I can explain. The difference between human rights legislation and the protection that I seek to give is that the human rights legislation deals with process, whereas I am concerned about individual injustice being rectified in front of a tribunal in the same way as individual employment injustice can be rectified in front of an employment tribunal.

Greg Clark: I take my hon. Friend's point, but presumably the tribunal would have some locus when it comes to procedural injustice, as well as the outcome. A more convincing explanation of the interaction of the Human Rights Act and the tribunal would have helped.
	Judicial review is available. I take my hon. Friend's point that sometimes that is not accessible because it is expensive, but it is not that no mechanism is available. I was not convinced by his argument that we should add yet another public body to the list. However, if the case is to be made for a genuine appeal tribunal, I do not think that the proposed tribunal goes far enough. A tribunal that does not have a genuine right of redress is misleading.
	If there is no obligation on Ministers to take into account, or act on, the considered views of a tribunal, when litigants may have gone to considerable lengths and expense to make their case, it would be most unsatisfactory. My hon. Friend the Member for Christchurch said that the Bill would raise expectations among foreign nationals that they could be employed under the Crown. That is fine. We should be raising expectations. People may already have such expectations and are astonished that they cannot be fulfilled.
	My concern about the tribunal is that it could raise the expectation that it has some power. From correspondence and conversations with my constituents, I know how bitterly disappointed they are about the consequences of the parliamentary ombudsman's report into Equitable Life. That is an analogous situation in which expectations were raised, because complaints were investigated and recommendations made but Ministers roundly ignored them. There is a danger that we could be going down the same route.

Christopher Chope: I, too, have constituents who are concerned about Equitable Life, but unless I have missed something, my understanding is that the case is still being considered by the parliamentary ombudsmaneven at this late stage. She has yet

Mr. Deputy Speaker: Order. I think the hon. Member for Tunbridge Wells (Greg Clark) made an error in introducing that analogy and it should go no further.

Greg Clark: I shall go no further down the path of error, Mr. Deputy Speaker.
	We have questions about who will serve on the tribunal and whether the tribunal can ever meet the expectations of litigants and people with genuine grievances. As a Front-Bench spokesman, I am enjoined constantly by the shadow Chancellor that our party, in preparing for government, should not enter into unfunded spending commitments. We are rigorous about that, so as my hon. Friend the Member for Christchurch failed to disclose where the money would come from and how much it would bedespite his 70-minute speechit would be reckless for our party to support from the Front Bench a clause that had such financial consequences.

Christopher Chope: I am grateful to my hon. Friend for his candour in sending out such a strong signal. He has indicated that he supports the Bill as drafted, but does he not think that the mere passage of the Bill might incur public expenditure?

Greg Clark: I am not sure that it would. It would allow the Crown access to the best people for the job. At present, we pay employment agencies to fill gaps in civil service employment so if there were more people to choose from it could contribute to economy in the public services, which we would all welcome.
	I do not want to detain the House. Important points needed to be put on the record and I hope that in my interventions and these brief remarks I have been able to explain why I cannot lend my hon. Friend support from the Front Bench. None the less, we have had a good discussion; it is important to be candid about such proposals and give them a thorough airing, as we have done. I shall be interested in what the Minister says, especially about the financial consequences of the new clause. Perhaps she will allay my concerns that the costs could be substantial and that they could take the Government along a financial road that the Opposition are reluctant to go down.

Gillian Merron: I urge the House to resist new clause 1. I have listened to the debate and am glad to have heard again today the commitment to good legislation and transparency we heard in Committee.
	I am intrigued by the comments of the hon. Member for Tunbridge Wells (Greg Clark) but welcome the fact that he joins me in resisting the new clause. I very much share the view of my hon. Friend the Member for Hendon (Mr. Dismore) that the new clause literally does not fit the Bill. I explained in Committee andin view of the time, I shall have to put it like thisI would have liked to reiterate in the debate on the second group of amendments that the Government's intend only a small percentage of civil service posts to be reserved for UK nationals in any rules made under clause 2. Indeed, the Government fully support my hon. Friend's desire that the vast majority of civil service posts should be open to all, regardless of nationality. Of course, candidates should be selected on merit, on the basis of fair and open competition, and with all the usual safeguards. We have the best civil service in the world and the best civil servants serving us in this country. We should continue to develop and progress to protect that position.

Lembit �pik: Given the Minister's comments and the expressed support of the Conservatives and Liberal Democrats for the Bill, if it were to fall today, would she introduce it as a Government Bill, knowing that she would get support from all parties?

Gillian Merron: I can certainly give a commitment that the Government are committed to ensuring that the Bill's provisions progress, because we feel that that is the sensible way to preserve our place in the world with regard to having the best civil service. The House is aware that some posts in the obvious sensitive areas of security, intelligence, border control, diplomacy and immigration will be reserved for UK nationals, but those posts comprise only about 5 per cent. of all civil service positions. I am sure that the House will agree that it is necessary and perfectly proper for those posts to be reserved for UK nationals.

Philip Davies: Given that the Minister saidquite rightly, in my opinionthat we have the best civil service in the world, based on the current arrangements, can she explain why the Bill is so necessary? How do her remarks about opening things up to foreign nationals meet the Prime Minister's pledge about British jobs for British workers?

Mr. Deputy Speaker: I think it might be timely for me to remind the House that we are discussing new clause 1, not the Bill as a whole.

Gillian Merron: Mindful of that, we will continue, Mr. Deputy Speaker.
	I draw the House's attention to the fact that the Bill provides for rules that contain the flexibility to enable Ministers and, if necessary and appropriate, heads of the security and intelligence services, to grant exemptions in certain cases. I consider it wholly unjustifiable and unnecessary for the Bill to provide for the possible creation of the tribunal suggested in new clause 1. It is an unnecessary level of bureaucracy, which I would have thought hon. Members would be as keen to resist as I am. I note that the new clause contains only the provision to make recommendations.
	I make my comments about the measure being unnecessary and unjustifiable in view of later proposed amendments, which hon. Members will have seen, in which the Government have been most responsive to the Committee's deliberations. If we were to get to them, they would introduce parliamentary scrutinysomething not currently in placeand make it quite clear that we are talking about posts and not people. In that respect, the new clause does not fit the Bill, and I urge the House to resist it.

Christopher Chope: This has been a good debate, albeit slightly truncated. The promoter of the Bill, the hon. Member for Hendon (Mr. Dismore), said that he was surprised to have it sprung on him, but he has had more than three years' notice of it. He said that he has been trying to get this Bill on the statute book for five years, and every time it comes back, there is scope for it to be improved. That is what we are trying to do today. Surely the serious point is that, if the Bill is that important to the Government, it should be a Government measure. The press tells us today that the House will be underemployed in the coming season because we do not have enough legislation. It is sad that we should describe ourselves as needing legislation in order to be occupied. However, if that is the case, and there are spare days, why do not the Government use them to introduce the Bill so that they can get the credit for it?

Edward Leigh: Perhaps because of cost implications.

Christopher Chope: My hon. Friend makes the important point that there is a hidden agenda. However, perhaps the Government do not want to be seen to support the proposition in public because they believe that they may come in for some criticism at a time when immigration into this country has increased massively. I am not going to go into that now because I hope to discuss it when we consider one of my amendments in the next group.
	I encourage hon. Members to take with a pinch of salt the Minister's reply to the hon. Member for Montgomeryshire (Lembit pik). She said that the Government were committed to the provisions in the Bill, but those words hardly suggest enthusiastic commitment by the Government to the measure. It amazes me that, after five years, during which the Government claimed to support the Bill, they have not taken it over.
	As the Minister said, we are talking about only 5 per cent. of civil service posts being affected by clause 2, whereas, three years ago, the figure was 10 per cent. That probably has more to do with the increase in the numbers in the civil service than reduction in the scope of clause 2 compared with the current position. The hon. Member for Hendon does himself and the House a disservice when he describes those who ask questions about the Bill and those who support a right of appeal, as outlined in the new clause, as xenophobic. We are quite the reverse. The new clause would enable people who would be counted out under clause 2 to be counted in after an appeal. It is the opposite of xenophobiaI presume that that is xenophilia. I therefore describe myself as a xenophiliac on the matter.
	The hon. Member for Hendon criticises the new clause on the basis that I got it all wrong. Fortunately, he did not pursue the suggestion that it should not have been selected. One of the reasons for his confusion is that he has anticipated our accepting the amendments in the next group. We have not accepted them and, therefore, his reference to posts rather than people does not apply. He shakes his head, but clause 2 is entitled Power to impose new nationality requirements and states:
	Rules may be made imposing requirements as to nationality which must be satisfied by a person employed.
	Subsection (2) provides for rules
	as to nationality which must be satisfied by persons of a description specified.
	Although Government amendments would make persons posts, they have not been passed. Perhaps that will happen later today, but it has not happened yet. We must therefore consider the new clause as introducing an appeals procedure under the Bill as it was presented to the House and considered in detail in Committee. It therefore does not wash for the hon. Gentleman to say that the new clause does not fit the Bill.
	The hon. Gentleman says that there is no requirement that the appeal process must result in the Minister accepting the recommendation. However, that is a point in favour of the new clause and shows how reasonable it is. If, for instance, some sensitive information comes to light in the context of the security service, the Minister can take that into account, even though the tribunal that I propose to set up perhaps would not have been able to do so in its considerations. Again, that argument is not a valid objection to the new clause. The other point that I find odd is that three years ago the hon. Gentleman said that he was neutral on the new clause. Now he is allying himself against it, but he has not produced any arguments in support of that position, other than the fact that those on his Front Bench are against it and he perhaps thinks that it is in his best interests to go along with them.
	I much enjoyed the contribution that the hon. Member for Montgomeryshire made. He shows himself to be a person of generous spirit. We obviously wish him well in his campaign to become the president of his partysome of us wonder why he is not setting his sights even higher, to become leader of his party. I think that he would be the first Estonian-born leader of the Liberal Democrats or, indeed, of any party in this

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will allow me to point out that this appears to be outside the scope of the new clause.

Christopher Chope: Absolutely, Mr. Deputy Speaker; although if the hon. Member for Montgomeryshire was engaged in that activity, he would not have been with us today, and we have all benefited from his contribution to the debate.
	My hon. Friend the Member for West Chelmsford (Mr. Burns) was polite but quite persistent in suggesting that the terms of my new clause were not robust enough. He persisted in his criticisms in a series of interventions during my introductory remarks and said that we needed a much more watertight appeal mechanism. As I said earlier, new clause 1 is a lot better than it might otherwise have been. Because we are potentially dealing with security issues, there is a reason to say to the Government, Well, there may be circumstances in which you won't be able to accept the recommendations of a tribunal, although I would hope that that would happen in the minority of cases. However, we have made a reasonable attempt to secure a form of words that could not be criticised on the grounds that I am being naive about national security. There is no reason why a tribunal would necessarily be able to have before it all the information relevant to national security matters. That is why there should be a residual discretion, to be exercised reasonably by the Government, in considering the appeal process.
	My hon. Friend also asked why we could not have an appointments commission deciding on the composition of the tribunal. Again, I do not disagree with the principle of the idea, borne out of his strong and understandable feeling that too many appointments to bodies are rigged by the Government. The proposal has not been included in the new clause, again because we hope that the Government would be more benevolent in their outlook and not feel the need to pack a tribunal with its own devotees, but instead be quite content to let people with objective judgment and experience take on that role.
	My hon. Friend also said that new clause 1 should contain a requirement that we see the draft regulations first. As I pointed out to him, there is nothing in the proposal that precludes the provision of draft regulations, and it would indeed be desirable to see the regulations in draft so that they could be the subject of consultation. Such consultation would not, however, mean that the regulations would be acceptable either to me or to other hon. Members. It is within the Government's remit to decide what the regulations should be. My hon. Friend also expressed his concern about the European convention on human rights and wondered whether there would be a duplication involved.
	The most pertinent comments, which went to the heart of the issue, were raised by my hon. Friend the Member for Tunbridge Wells (Greg Clark). He is an avowed and unapologetic supporter of the Bill, and he is concerned that the Government say that they support it yet are not prepared to introduce such a measure in Government time. He is also worried about the proliferation of public bodies, and I share that concern. I would be happy to work with him, as we prepare for government, to draw up an agenda for significantly reducing the number of such bodies.
	My hon. Friend pointed out that I had been unable to produce a broad estimate of what the proposal might cost. I could not do so because the cost would depend on the behaviour of the Government and the discretion that they would give themselves under the provisions of clause 2. My hon. Friend the Member for Gainsborough (Mr. Leigh) said that any additional costs would pale into insignificance compared with the torrential waste that occurs in so many Government Departments at the moment. For example, only a few weeks ago, somebody called Wanless, who had previously proposed that we should spend vast extra sums on the health service, said that most of that money had been wasted. We are talking about the waste of a huge proportion of public expenditure.
	My hon. Friend the Member for Tunbridge Wells also spoke about judicial review, and seemed to think that that option was available and that that was no big deal. I would simply say to him that to expect people to apply for judicial review in order to obtain justice in relation to job applications is asking the impossible. Judicial review is a long, and very expensive, process. In planning cases, for example, even after they have gone to judicial review and the process has been found to be faulty, the arrangements do not deal with the substance of the matter, which is what people are normally concerned about. Judicial review would not deal with the substance of the complaints of people who felt aggrieved about the operation of the provisions.
	My hon. Friend said that people need a genuine right of redress but that giving the Government the discretion to decide whether to accept the provisions would result in something less than such a genuine right. I accept that, but national security matters could be raised in this context, and it is better to leave some discretion to the Government. At that point, Mr. Deputy Speaker intervened to prevent us from getting into a discussion about Equitable Life.
	Let us conclude with what the Minister had to say. She referred to bureaucracy and felt that the proposals were unjustifiable and unnecessary. She said that the Government supported selection on meritdon't we all! The message that should come out of today's proceedings
	 It being half-past Two o'clock, the debate stood adjourned.
	 Debate to be resumed on  Friday  26 October.

Paul Farrelly: On a point of order, Mr. Deputy Speaker. A number of important Bills appear on the Order Paper today, including my own Bill to try to stop discrimination against agency workers. There is a Bill on trade union rights and one on age-related macular degeneration, which causes blindness in 40 per cent. of the population. There is also an important Bill that deals with free prescription charges for cystic fibrosis sufferers. Will you therefore advise me, Mr. Deputy Speaker, on behalf of the millions of vulnerable people affected by those Bills and also on behalf of the people in the Gallery, including the schoolchildren there, how I can put on record my dissatisfaction with the antics of a small Conservative wrecking crew that has stopped us from considering those Bills?

Mr. Deputy Speaker: First, I should say that references to people or persons outside this Chamber are not in order. Secondly, the hon. Gentleman knows perfectly well what the rules of engagement are in respect of the availability of private Members' time. Clearly, far more private Members' Bills are proposed during a Session of Parliament than the amount of time available for their expeditious disposal. Inevitably, we reach a point where, because of consideration of the Bills that have priority according to the ballot conducted at the beginning of a Session, many other Bills will not make progress. However, matters that are thought to be of general interest often have a habit of coming back againand some eventually succeed.

John McDonnell: Further to that point of order, Mr. Deputy Speaker. May I ask Mr. Speaker to examine the case for granting a private Member's Bill that has reached this stage and been accorded such priority by the House some sort of carry-over process similar to the process applied to Government Bills?

Mr. Deputy Speaker: I would say that many changes in procedure take place over the years. The hon. Gentleman might wish to write about that to the Chairman of the Modernisation Committee, or, indeed, to the Procedure Committee.

Remaining Private Members' Bills

TEMPORARY AND AGENCY WORKERS (PREVENTION OF LESS FAVOURABLE TREATMENT) BILL

Order read for resuming adjourned debate on Question [2 March], That the Bill be now read a Second time.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

TRADE UNION RIGHTS AND FREEDOMS BILL

Order for Second Reading read.

Hon. Members: Object.
	 To be read a S econd time on Friday 26 October.

AGE-RELATED MACULAR DEGENERATION BILL

Order for Second reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

CYSTIC FIBROSIS (EXEMPTION FROM PRESCRIPTION CHARGES) BILL

Order read for resuming adjourned debate on Question [23 March], That the Bill be now read a Second time.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

TERMINATION OF PREGNANCY BILL

Order for Second reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

LAND USE (GARDENS PROTECTION ETC) BILL

Order read for resuming adjourned debate on Question [2 February], That the Bill be now read a Second time.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

PROVISION OF PALLIATIVE CARE BILL

Order for Second Reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

TELECOMMUNICATIONS MASTS (PLANNING CONTROL) BILL

Order for Second Reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

RETAIL PACKAGING RECYCLING BILL

Order for Second Reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 26 October.

FIXED TERM PARLIAMENTS BILL

Queen's Consent not signified.

John McDonnell: On a point of order, Mr. Deputy Speaker. Is there a way of recording that the Trade Union Rights and Freedoms Bill was objected to and opposed by the Government?

Mr. Deputy Speaker: The answer is no, but the hon. Gentleman has just put a point of order that may convey the same information.

QUEEN MARY'S HOSPITAL (SIDCUP)

Motion made, and Question proposed, That this House do now adjourn. [Alison Seabeck.]

Derek Conway: May I thank Mr. Speaker for allowing me this brief debate on the future of services at Queen Mary's hospital in my constituency in Sidcup? I thank the Under-Secretary of State for Health, the hon. Member for Brentford and Isleworth (Ann Keen), for being in her place to reply today. I am also delighted to see my hon. Friend the Member for Bexleyheath and Crayford (Mr. Evennett), who has been at the forefront of the campaign to protect our services, the hon. Member for Erith and Thamesmead (John Austin), who shares with us representation of the borough of Bexley, and our parliamentary neighbour the hon. Member for Eltham (Clive Efford). I hope that they will catch your eye later, Mr. Deputy Speaker. I will not make my remarks overlong so that, with your consent, they can contribute to the debate.
	This matter is of enormous concern in Old Bexley and Sidcup, the borough of Bexley and the neighbouring areas that use the facilities at Queen Mary's hospital in Sidcup. Like many hospitals across the country, it has had severe financial problems. The four acute hospitals in south-east London, three of which have private finance initiative status and were new builds, have had special difficulties. Queen Mary's hospital is much older, but in 2005 it still had a 20 million deficit. That has been reduced this year to just under 2 million1.8 million. That required an enormous effort by the clinical staff at the hospital in how they go about their business, and by the administrative and management staff. The turnaround has been remarkable, and they should be congratulated on and praised for that.
	As the Minister will no doubt tell the House, the cost of operating at hospitals is based on a cost average set at 100 points on the scale. In 2005-06, Queen Mary's was just over that at 104 points, but that is because it was frequently paid under tariff by our local care trust. This year, it is below that 100-point tariff. The institution is now financially efficient in the health care that it provides. There were more than 23,000 emergency and 3,000 elective in-patients over the past year. There were 16,500 day cases, and 52,000 new out-patient appointments. There were 132,000 follow-up out-patient appointments. The number of patients treated is of a high order at this very effective local acute hospital.
	The accident and emergency department is under threat of closure, which is obviously of major concern. Over the past year, 74,682 people attended the department, of whom 10,803 had to be admitted. There is clearly great demand, and people are given very efficient treatment: 98 per cent. of those patients were seen and treated, discharged or admitted in under four hours. Not only is Queen Mary's financially viable, but it has one of the most efficient accident and emergency units in the country. That is why we are concerned about the clinical proposal to cut provision from four hospitals to two. There would not be enough beds, doctors or space. Super-trauma centres may be the way of the future, but people are worried about whether they will be able to cope with the volume.
	Of particular concern to those of us who represent London areas, particularly in south-east London, is travelling time. It is not so much the distance that is the problem. The journey from the gates of the House of Commons to the boundary of my constituency can take 40 minuteslegallybut it can also take as long as two and a half hours, with great deal of bad language and bad traffic.
	The maternity unit at Queen Mary's is under threat of complete closure. Some say that a midwifery unit may remain, but at the moment nothing is intended to remain. Yet the maternity unit is superb. It has been clinically assessed as being at level 2, which is the highest rating in the London area. Last year it dealt with 3,021 births. People keep telling me that the number of births is falling, but that is not borne out by the figures. This year, the number has risen to 3,360.
	As the Minister will know, the Royal College of Midwives has set 3,000 births a year as the benchmark for an acceptable and viable unit for training midwives. Although those of us with children will pay tribute to the services and expertise of midwives, a midwifery unit alone is clearly not enough. My elder son was born in distress and required surgical intervention to arrive safely with us. More than 20 per cent. of births in this country require surgical intervention, which a midwife cannot provide. A midwifery unit alone will not give our constituents enough reassurance. I am sure the Minister will be concerned to learn that the United Kingdom is now 19th in the world survey of birth safety. We hoped that the situation would get better, not worse.
	Although Queen Mary's is one of our older hospitals, its infection rate is much lower than those of many of its neighbours, especially those in London. There were no cases of MRSAI hope the House will forgive me if I do not give the name in full; that would be too much of a challengein June, July or August. Two years ago there were 41 cases; the number was down to 12 this year. The number of cases of clostridium difficile fell by 30 per cent., against a national rising trend, and the board has allocated an extra 500,000 for cleaning.
	This is a hospital that is serving the community wellit is both cost-effective and clinically effectiveand has a lower rate of infection than is found elsewhere. Despite all that, however, it is subject to perpetual rumour and speculation, which undermines public confidence and is understandably of great concern to the excellent men and women who work at the hospital and provide us with such cover. The panic locally was started by Lord Warner, a former Health Minister in the present Government who has been appointed chairman of the NHS provider agency.
	When the four acute boards were instructed to merge their chief executive posts, no account seemed to be taken of the 3 million or 4 million redundancy costs that that would involve for senior staff. At a number of meetings, Lord Warner has said that he would like to see the Queen Mary's site cleared for housing, which gives us no reassurance at all. Although the site near the A20 is no doubt valuable, we would prefer it to be kept for a hospital.
	There are clinical proposal groups which will report by the end of the month. They will go to Professor Alberti for scrutiny. We all wonder what the Darzi plan overlay will be for that, because everything seems to be very confusing. There is a tremendous race to get all this done by mid-December before Christmas, so a valued local hospital and dedicated staff are being pressured into accepting something they do not wish to happen.
	There have been problems at the hospital, but they have been met, despite the hospital not having a financial level playing field for a number of years. We accept that there must be some changes. Nobody is sticking their head in the sand. What is confusing, however, is the number of fingers in the pie. NHS London seems to be wobbling all over the place. Who will count, Darzi or Alberti? Will the clinical boards take into account travel times? I am told that that is not part of their remit. The A Picture of Health consultation is being steamrollered through, so the number of hospitals will fall from four to two with no one sure what is intended. The care trust has got its finger in the pie, and the acute trusts are all over the shop. Meanwhile, behind the scenes, Lord Warner pushes on through the swirling, confusing mess.
	I have a warning for the Minister. We are glad that she is present, and we look forward to hearing what she says, but those who stand behind her who are creating this swirling mess need to know that closure of the hospital will be bitterly opposed.

John Austin: The hon. Member for Old Bexley and Sidcup (Derek Conway) has highlighted the anxiety felt by his constituents and those of other Members present. People are attached to their local hospitals for very good reasons, and he has identified some of the reasons why so many people are attached to Queen Mary's, Sidcup.
	We need an assurance from the Minister that there will continue to be four hospitals serving the boroughs of Bromley, Bexley, Greenwich and Lewisham, whatever the outcome of the consultations. Queen Mary's has been financially challenged, but there has been a turnaround both financially and in quality of care.
	The Bexley Care Trust is, however, more financially challenged, and some of us fear that some of its proposals have been financially driven rather than patient-driven. Maternity services offer an example of that. According to the Royal College of Midwives, a unit needs to have 3,000 births per year to be registered for training, and it also needs to meet that target for the Royal College of Obstetricians and Gynaecologists to be able to guarantee obstetric cover. The care trust has told us that the number of births has been falling below that. I would be the first person to say that the unit might need to change if it were not meeting such targets, but the care trust made its calculation in terms of the places it had commissioned at the hospital, ignoring those coming from the constituency of my hon. Friend the Member for Eltham (Clive Efford) and from Bromley. As the hon. Member for Old Bexley and Sidcup said, there are more than 3,000 births this year, and there is no reason to close the maternity unit on the grounds that it cannot meet the RCM or RCOG figures.
	With accident and emergency, I accept that there might be an argument for change. There might be a cogent argument for there to be fewer accident and emergency units. If I suffered a stroke or a cardiac arrest, I would not necessarily want to be taken to my nearest accident and emergency unit. If I had a stroke, I would want to go to a specialist unit where a proper diagnosis could be made instantly as to what kind of stroke it was, so that the right treatment could be givenand similarly with cardiac arrest. However, the proposal that Bromley, Lewisham, Greenwich and Bexley should go from having four acute trauma and accident and emergency units to two shows complete ignorance of the traffic situation in that area and the transport infrastructure.
	I also think the proposals are premature. There is a great deal of merit in what Professor Darzi has suggested about, for example, the treatment of stroke and cardiac disease. Let us consider other conditions, too. If someone close to me had breast cancer I would not want them to go to the nearest general hospital to be seen by some general surgeon who does a bit of this and a bit of that. I would want them to go to a specialist unit. There is an argument for the concentration of specialist services in centres of excellence.
	There is also much merit in Lord Darzi's proposals for local elective centres. At the end of the day, Queen Mary's might become a centre of excellence, dealing with very real needs in the communityhips, knees, hernias, routine gynaecology and cataracts. That would not be a downgrading of the hospital, as long as it continued to provide 24-hour emergency care for people who are not blue-light emergency cases. It would be providing a vital service.
	However, all such discussion is premature, because we have not yet had the debate about Darzi and what kind of health service we want for the next five or 10 years. I want an assurance from the Minister that we will not be reduced to only two hospitals serving our areathat there will continue to be four hospitals, and that the decisions will be about what services are provided at which hospital, and which services might be more effectively provided in the community.
	I say this to the Minister: if the proposed changes are patient-driven and can be proved to be safer and more effective and have better outcomes for my constituents, my hon. Friend the Member for Eltham (Clive Efford) and I shall support the Government. However, if we are not convinced that they are safer and offer better outcomes for our constituents, and we think that they are financially driven, we will join Opposition Members in opposing the proposals.

Several hon. Members: rose

Mr. Deputy Speaker: Order. I should say to hon. Members with an obvious interest in the debate that I have to protect the hon. Member for Old Bexley and Sidcup, who secured it, by ensuring that there is a full ministerial answer to what is obviously an important local matter.

David Evennett: I congratulate my hon. Friend the Member for Old Bexley and Sidcup (Derek Conway), my constituency neighbour, on securing this important and much-needed debate. The future of services at Queen Mary's hospital in Sidcup is a major concern to my constituents and there is real fear locally about the possible closure of the accident and emergency and maternity units. There is also concern about a downgrading of services across the board in that excellent hospital. Queen Mary's is much loved, used and supported not only, as we have heard, by people in the borough of Bexley, but by those from across the border in Bromley and Greenwich.
	My late dear father Norman Evennett was treated superbly by the accident and emergency unit at Queen Mary's last year. The continuing excellence of the professionalism and commitment of the medical staff has been evidentfrom that emergency, which I experienced personally, and from the experiences that constituents have told me about. The maternity unit is extremely popular with my constituents; many new mothers express to me great satisfaction with the service that they have received from it. However, they are concerned about its future viability.
	My hon. Friend has explicitly and effectively put forward his concerns. I share them; I have campaigned on all those points in publicin meetings with the Bexley Care Trust and with the chief executive of Queen Mary's. I pay tribute to all the local people campaigning against cuts in vital servicesI am thinking of the petition in the  Bexley Times and of Councillor Sharon Massey, the Bexley council cabinet member for social services, who is campaigning with us to save vital services in our borough. I am, however, disappointed that Bexley Care Trust has not been more robust in its support for Queen Mary's hospital, fighting for vital local services for the people of our borough.
	My hon. Friend referred to the fact that Queen Mary's has had problems in the past. We acknowledge that, but we should also give credit to its chief executive, Kate Grimes, and her team for their work in turning round the hospital's problems. This week, we have heard debates and comments about hospital infectionsQueen Mary's has done superb work in removing hospital infections, particularly MRSA; it has done superb work on the clinical front as well.
	My constituents have been writing to me. I shall quote just two of them. One wrote:
	In the event of A  E closing, to which hospital will its patients from Bexley be taken, and will this hospital, or hospitals, be able to meet the four-hour deadline with the extra 223,000 patients?
	As my hon. Friend mentioned, the real concern is that if we cut back or downgrade the services at Queen Mary's and if there are accident and emergency units only at the other three hospitalsor perhaps two; the hon. Member for Erith and Thamesmead (John Austin) has highlighted that fear of oursthe extra time taken to get people to those units could prove disastrous.
	Another constituent said:
	The withdrawal of any of the services at Queen Mary's can surely only be to the detriment of the community and any proposals to do so appear to be based on financial considerations rather than health ones.
	We look to the Minister and the Government to deal with this issue. Yes, there have to be changes; we know that nothing stays the same, as my hon. Friend the Member for Old Bexley and Sidcup said. However, we must make sure that the changes are driven by clinical, not financial, considerations. Many of us worry that the good facilities that we have will be undermined for financial reasons, and not in the pursuit of clinical excellence.
	I realise that time is pressing and that I must conclude, Mr. Deputy Speaker. If our accident and emergency units and maternity units are removed from QMS, Bexley alone of the four boroughs will be without the facilities that Bromley, Greenwich and Lewisham have. That is neither fair nor acceptable, and it will result in an inferior service for my constituents, those of my hon. Friend and those of the hon. Member for Erith and Thamesmead. Vital services should not be cut. The medical care of our constituents requires a decent service at Queen Mary's. I hope that the Minister will take that on board.

Clive Efford: I am grateful to you for calling me, Mr. Deputy Speaker, and may I also thank the hon. Member for Old Bexley and Sidcup (Derek Conway) for giving me this opportunity to make a contribution? I will be brief, and I will take your guidance.
	There are some who, in local papers and other local forums, are trying to portray what is happening as cuts, and I want to put the situation in context. Back in 1997, more than 14,000 people were waiting longer than 13 weeks for treatment in the four hospitals in the area; that figure is now down to 1,394. In 1997, 4,619 people were waiting more than 26 weeks for treatment; this July, that figure was down to just oneacross the four hospital trusts. Between 2003 and 2008, Greenwich PCT had an increase of 133.4 million, and Bexley PCT one of 100 million. Across the four PCTs, the increase has been 518.7 million, so we are not talking about cuts in hospital and health service expenditure. We are talking about a reconfiguration of services to meet the modern needs of our NHSnew drugs, new forms of treatment and patient choice.
	My PCT is about to consult on the reopening of a town centre cottage hospital in my constituency, which was closed several years ago, as a 24-hour, seven-days-a-week, walk-in GP treatment centre. That proposal is enormously popular in my constituency and people are very happy about it, but it is bound to have an impact on services elsewhere. But that is not cuts; it is meeting local patient need through the reopening of that hospital.
	I accept that services have to change, but we have to move forward on the basis of four hospital sites that each have urgent care facilities. The most urgent and traumatic cases must be dealt with in centres that can provide treatment safely and in a modern setting, providing people with timely interventions that increase the likelihood of survival and of making a full recovery. That is what we are duty-bound to deliver and what our constituents deserve, and it is what we must strive for. There should be no scaremongering about cuts; rather, we should be talking about improving the service. I will accept changes that will improve the service for my constituents, but I am not going to accept changes forced on us because of financial considerations. That is the basis on which we must move forward, and on which Ara Darzi and others must consult my constituents.

Ann Keen: I congratulate the hon. Member for Old Bexley and Sidcup (Derek Conway) on securing this debate on the future of Queen Mary's hospital, Sidcup. I also thank those of my hon. Friends and other hon. Members who have participated so well in the debate and shown passion for and concern about their local NHSa passion and concern that we all share nationally regarding the changes that we are to make in the health service. I know that this issue is of concern to the hon. Gentleman and his constituents, and I appreciate the comments that he and others have made in the House today.
	I also congratulate Queen Mary's Sidcup on how it has turned itself aroundI acknowledge the remarks and tributes of the hon. Member for Old Bexley and Sidcup at the beginning of this debateand staff in south-east London on the hard work that they have put into improving services and performance. Millions of people are receiving high quality and safe services every day. The best of the national health service is among the best health care in the world. We should all be proud of its achievements and, given the comments made in this House today, I know that all hon. Members are.
	For that reason, I understand that when we talk about potential changes in services, it leads to huge public interest, debate, and, in some cases, anxiety. I recognise that change is difficult and appreciate that it can provoke powerful reactions from stakeholders. When people talk about the reorganisation of services, they think that it is about saving money; it is not. It is about saving more people's lives and making care more convenient for local people.
	Lifestyles, society, medicine, technology and the NHS itself have all changed over the past 60 years. Medicine is, and always should be, dynamic. Change is nothing new in the NHS. It has always responded to change and the latest treatments by organising itself to deliver that care. We are responding to a variety of drivers for change now.
	The aim of the A Picture of Health project is to improve the quality, safety and patient experience of local services. That can be achieved only through changes in how those services are delivered. The proposed benefits to patients will be services available closer to their home and specialist hospital services concentrated closer together. That is the aim of all reviews and of this one in particular. That approach will improve patients' experience by providing safer services and ensuring that all specialists have the appropriate experience and expertise.
	The A Picture of Health project is clinically led. Clinical staff across the four outer south-east London boroughs and in the four hospital trusts take a lead in determining how services should best be delivered in the future in those four trusts. More than 100 hospital-based staff took part in a plenary session held on 25 September and further consultation with clinical staff working in the community is also taking place. In addition, there has been strong stakeholder engagement throughout late 2006 and 2007, beginning with The Big Ask website consultation run by Ipsos Mori from October 2006 to January 2007 and continuing with four public engagement events.
	The national clinical advisory team, under Professor Sir George Alberti's leadership, is reviewing the emerging options for change during October 2007, giving further assurance that the clinical case for change can be delivered. Further to the events organised during September and October to gather opinions from clinical staff, Sir George Alberti is talking to a wide range of local stakeholders during October and there will be two public feedback events ahead of full public consultation. Examining the health service involves such a dramatic change, and this is a good way of consulting. I know that all hon. Members will take part in those consultations with their constituents.
	As part of the consultation, I also understand that Sir George Alberti visited Queen Mary's Sidcup yesterday morning and discussed the case for change and the emerging proposals with a range of doctors and other health professionals. Perhaps hon. Members would like to look into what happened following those discussions. I believe that there will be an opportunity for the hon. Member for Old Bexley and Sidcup to discuss any concerns that he has with Sir George before he concludes his review. I reassure him that consultation on proposals for service change will not begin before Sir George has reported on his review.
	I appreciate the great interest that the hon. Gentleman has taken in the review at a local level, and the way in which hon. Members have spoken in this debate. I understand the specific issue that the hon. Member for Old Bexley and Sidcup has raised today in relation to the A Picture of Health programme.
	On 30 August, Lord Warner, the chair of the NHS London provider agency, agreed with the chairs and chief executives of the four hospital trusts that a proposal for a single executive team across all four trusts should be looked into. Each of the four trusts is currently assessing, individually and collectively, the merits of establishing a single executive team to support their own separate trust boards, which would be retained. A final decision has yet to be taken, but I understand that this proposal could help to facilitate the significant change programme across the local health economies and enable the development of services that will provide best value for money in the future.
	The four south-east London trusts are on the Department's list of financially challenged trusts. The NHS London provider agency continues to work with each trust to develop a range of options for solving the indebtedness while maintaining standards of patient care and value for money. Our Department is working closely with strategic health authorities to identify long-term solutions for the trusts. I must reiterate that this work is not the driving force for the review of servicesthat is the clinical case for change.

Derek Conway: I understand what the Minister is saying and this is a helpful reply. Can she assure the House in relation to Lord Warner's activities that no chairman or chief executive of any of those four acute hospitals will be dismissed if they object to the way in which he is driving the measure behind the scenes?

Ann Keen: The hon. Gentleman's point is valid, but it would not be appropriate for me to comment while the executive team is looking at the structure.
	I am assured that Queen Mary's Sidcup will not close as a result of the A Picture of Health programme, and that any future disposal of land at Queen Mary's Sidcup would only involve land no longer needed for patient services. Assuming that proposals for change in the A Picture of Health programme also proceed to public consultation, it is for the local NHS to ensure that there are appropriate consistencies between the two consultations
	 The motion having been made after half past Two o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at seven minutes past Three o'clock